Bitcoin reaches a new high of $71,000 as demand surges

Bitcoin reaches a new high of $71,000 as demand surges
Bitcoin reaches a new high of $71,000 as demand surges

Bitcoin hit a fresh high of more than $71,000 on Monday, with the largest cryptocurrency boom showing no signs of slowing.

Bitcoin reached a new high of more than $71,000 on Monday, as the largest cryptocurrency’s rally showed no signs of slowing.

Britain’s financial watchdog became the latest regulator to clear the way for digital asset trading products on Monday, announcing that it will now allow recognized investment exchanges to launch crypto-backed exchange-traded notes.

Bitcoin gained as much as 4.8% to a record $71,677 in European trading, pushing its year-to-date gains over 70%.

The world’s most valuable cryptocurrency has been buoyed by a rush of capital into new spot bitcoin exchange-traded funds, as well as expectations that the Federal Reserve may soon lower interest rates.

Flows of capital into the ten largest US spot bitcoin exchange-traded funds dropped to a two-week low in the week ending March 8, but still totaled about $2 billion, according to LSEG statistics.

“Bitcoin has started the week with a surge, dragging the rest of the cryptocurrency space higher with it,” DailyFX strategist Nick Cawley said.

The supply of bitcoin, which is limited to 21 million tokens, will tighten in April as the so-called halving event occurs.

Every four years, the rate at which new supply enters the market, as well as the reward for crypto miners, is halved, which tends to support the price.

“News also out earlier that the LSE plans to accept applications for bitcoin and ethereum ETNs in Q2 may have also helped today’s push higher,” Cawley stated.

The Financial Conduct Authority (FCA) of the United Kingdom stated that these products will only be available to professional investors, such as investment firms and credit institutions authorized to operate in financial markets.

The FCA warned that crypto exchange-traded notes (ETNs), which are bonds issued by financial institutions that track the performance of underlying assets, can be harmful to individual investors.

Nonetheless, demand is increasing across the investment community.

According to weekly data from the US Commodity Futures Trading Commission, asset managers now have the most bullish position in bitcoin futures on record.

In the week ending March 5, asset managers’ net long position, which is typically read as covering holdings of institutional investors such as mutual funds and pension funds, increased to 15,531 lots, worth $5.5 billion based on the current bitcoin price.

According to LSEG statistics, this is more valuable than asset managers’ long positions in sterling, valued at $2.78 billion, or their bearish positions in the Japanese yen against the dollar, valued at $1.49 billion.

Ether surged 2.1% to about $4,000, its highest level in two years.

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