Bitcoin Hits New All-Time High Before Halving Event

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Bitcoin hit a new record high of over $69,200 on March 5th! This was after a week of strong gains, with the price climbing over 21% compared to the previous week. This surpasses the previous record of $68,990 set in November 2021.

Here’s a breakdown of the events

  • Bitcoin price reached a new all-time high: This means it was more expensive than ever before.
  • Investors sold their Bitcoin: Some people who bought Bitcoin earlier at a lower price sold it for a profit when the price went up. This is called “locking in their winnings.”
  • The price dropped quickly: Because many people sold at the same time, the price of Bitcoin fell sharply.
  • This shows how volatile Bitcoin is: The price can go up and down very quickly, which can be risky for investors.

Bitcoin Hits New All-time High Before Halving Event 

In a historic move, Bitcoin reached an all-time high before its next block reward reduction (halving) for the first time ever. This breaks the trend seen in past cycles, where highs came after the halving. Some believe this signals a change in market behavior. However, the price quickly dropped as large investors sold their Bitcoin, highlighting the market’s sensitivity to price changes and the power of big players. While some see the correction as a short-term setback, others view it as a necessary adjustment for long-term, healthy growth in the Bitcoin market.

Bitcoin ETF Impact on Bitcoin Price Movement

Bitcoin’s recent surge has been fueled in part by the launch of Bitcoin ETFs. These exchange-traded funds make it easier for everyday investors to get involved with Bitcoin, similar to investing in stocks. Back in February, when Bitcoin climbed above $50,000, research suggests that a whopping 75% of new investments came through these ETFs. Some analysts even predict that Bitcoin ETFs could become bigger than gold ETFs, which are currently more popular, within the next two years! This suggests that Bitcoin ETFs are playing a major role in attracting new investors and driving up the price.

The demand for these funds was much higher than expected, and some money managers predict Bitcoin could reach over $100,000 by the end of the year. This excitement is also pushing up the price of other cryptocurrencies and related stocks.

Trading activity in these new ETFs has been very high, with billions of dollars invested in just two months. This activity benefits companies like Coinbase and Robinhood, which are involved in trading these funds. While there have been some technical glitches due to the high demand, these companies have assured users their funds are safe.

Fewer Celebrities in Crypto This Time Around

This year’s crypto cycle is different in one key way: fewer celebrities are involved. This could be because of the legal trouble some faced for past endorsements, or because the industry wants to avoid the negative attention past celebrity figures brought.

While some might miss the excitement celebrities can create, it’s a good thing for the industry. Research shows their advice is often bad, and some figures from the last boom lost trust due to various issues. Ideally, the industry will avoid relying on celebrities this time around.

However, history shows that influencers tend to appear when prices are rising, as they can help focus attention on certain projects. This can be risky, especially with the high use of borrowed funds in crypto trading, which can lead to big losses if the market turns. With a lot of “gambling” happening already, it remains to be seen if this cycle can be sustained without relying on celebrities or risky trading practices.

Conclusion

While Bitcoin’s record-breaking run in March 2024 showcased its potential, the subsequent volatility underscores its inherent risk. The unique absence of celebrity involvement this time around signifies a potential shift towards a more mature market, focused on sustainable growth through increased accessibility via ETFs. However, the question remains: can this new environment maintain its momentum or will risky trading practices and the allure of influencers return to cast a shadow on the future of Bitcoin? Only time will tell.

Via: 2Usethebitcoin.com

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