Bitcoin

Bitcoin was created 15 years ago as a decentralised alternative to the traditional financial system. It is somewhat paradoxical that the US Securities and Exchange Commission (<a href="https://blockhead.co/tag/sec?ref&#61;blockhead.co" rel="noopener noreferrer nofollow">SEC</a>) and Wall Street are driving the recent spike in the token&#39;s value towards record levels.Bitcoin exchange-traded funds (ETFs) are now considered legitimate, leading to a decrease in resistance from major players and increasing interest in a cryptocurrency from even former skeptic <a href="https://blockhead.co/tag/jp-morgan?ref&#61;blockhead.co" rel="noopener noreferrer nofollow">JP Morgan Chase&#39;s</a> Jamie Dimon.Traditional banking organisations are increasingly involved with cryptocurrency, even if the creator of Bitcoin <a href="https://www.blockhead.co/2024/02/26/beyond-craig-wright-emails-reopen-the-hunt-for-bitcoins-ghost-2/" rel="noopener noreferrer nofollow">remains unknown</a>.<a href="https://www.blockhead.co/tag/bitcoin/" rel="noopener noreferrer nofollow">Bitcoin</a> is here to stay. The widespread opposition to it on Wall Street is gradually diminishing.The recent surge in Bitcoin prices, reaching $40,000, then $50,000, and finally $60,000 in a short span, has demonstrated to analysts that the consistent and strong demand from a wide range of individuals will likely prevent the token from losing its position as a fundamental asset in the market.<img src="https://academy-public.coinmarketcap.com/optimized-uploads/d80381718a344ef083d0f58b6cbb7ba0.jpeg" />The delay in US interest rate cuts, formerly seen to be a threat to Bitcoin, did not diminish the strong excitement for the crypto.The established giants may still avoid the well-known volatile and scandal-prone asset, even if offered in the new regulatory-compliant ETF format.This is the strategy being adopted by Vanguard, a highly conservative establishment.Bank of America&#39;s Merrill Lynch and Wells Fargo now offer certain brokerage clients access to new <a href="https://www.blockhead.co/tag/etfs/" rel="noopener noreferrer nofollow">spot Bitcoin ETFs</a>, but they do not permit their advisors to suggest them.However, the money involved is not an illusion.The 10 Bitcoin ETFs now trading in the US have attracted over $8 billion in net inflows, with funds overseen by investment behemoths Fidelity and BlackRock receiving most of the investments.BlackRock&#39;s iShares Bitcoin Trust has gathered $10 billion in seven weeks, making it the fastest ETF to reach this milestone.To put the magnitude of the inflow into context - the first gold ETF took over two years to achieve the same milestone following its inception in 2004.The fresh influx of capital from ETFs must be directed towards purchasing Bitcoin in a market known for its &#34;hodlers&#34; who are content to retain their holdings and observe the increasing value.Everyone has a price, and the unexpected increase in demand has revitalised retail traders in the crypto market.However, the extra cash&#39;s influence on a huge crypto rise can amplify the dangers associated with the asset class, including that blueblood investment institutions are now involved, at least in reputational terms.Even if it&#39;s less exciting, basic market risk for Bitcoin is a major worry.Following the near-collapse of crypto lenders like <a href="https://www.blockhead.co/tag/celsius/" rel="noopener noreferrer nofollow">Celsius</a> nearly two years ago, self-proclaimed &#34;degen&#34; traders are piling on borrowed cash to maximise trading gains as they chase the rise.Aggregate open interest in Bitcoin derivatives — which can be leveraged up to 100 times — has risen about 90% since last year on centralised exchanges to reach the highest level since early 2022, when the previous crypto bull run ended, according to CCData.As per CCData, open interest on Binance, OKEx, and Bybit, three cryptocurrency exchanges, has surged to unprecedented levels since the bull market peak in 2021.Returning to levels last seen before the FTX market crashed in late 2022, Ledn&#39;s lending book gives out money secured by Bitcoin. This has led many to believe that the recent upswing would eventually be reversed.Digital asset solutions offered by CME Group are selling at record levels as Wall Street investors look for more conventional ways to hedge their bets.While this asset type is inherently unstable and vulnerable to changes in sentiment since it lacks an income stream or actual large-scale financial functionality, whether or not the owners of the new ETFs are prepared for a possible downturn is still being determined at this point.New ETFs give this crypto bull market credibility, which is a huge change from previous boom-and-bust crypto cycles caused by reckless speculators and products that eventually crashed: crypto loans that weren&#39;t always backed by anything, and, before that, initial coin offerings (ICOs) by startups that sold tokens but never delivered a real product.Expectations and conjecture have always been influential in driving bitcoin bull markets.There is a growing belief that the increasing number of new participants in the cryptocurrency market is just the beginning.Wealth managers and financial advisers are assisting their high-net-worth clients, including sovereign wealth funds, institutional investors, and extremely wealthy individuals, in entering a newly viable asset category.Regardless of whether Bitcoin reaches a huge milestone of $70,000 or $50,000, many think that the opening of the ETF floodgates has irrevocably transformed the game, both in the regular financial market and the crypto sector.

Party Rages on for Crypto Investors Riding Bitcoin's Wild Rally

Blockhead

2024年3月4日公開の他の記事

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