In a groundbreaking surge, the price of Bitcoin soared to an unprecedented high, surpassing the $69,200 mark on March 5, marking a remarkable 5% gain in the previous 24 hours.
This remarkable milestone follows a robust 21% rally over the past week, shattering the previous all-time high of $68,990 set on the Coinbase exchange in November 2021. Analysts attribute this surge to substantial inflows from newly introduced spot Bitcoin exchange-traded funds (ETFs) in the United States.
The ETFs have brought about a surge in passive, price-agnostic demand for Bitcoin, solidifying its position as a reliable store of value and contributing to its noteworthy price appreciation, as revealed in a research report by Bitfinex analysts. According to their projections, a conservative price target of $100,000-$120,000 is anticipated to be achieved by Q4 2024, with the cycle peak expected sometime in 2025 in terms of total crypto market capitalization.
The analysts also suggest that the introduction of spot ETFs may mitigate Bitcoin’s downside volatility post reaching new cycle peaks. They draw parallels to a stable trajectory observed in gold prices after the launch of gold ETFs.
Bitcoin ETFs have played a pivotal role in the ongoing rally, accounting for approximately 75% of new investments in the cryptocurrency as it crossed the $50,000 threshold by February 15, according to CryptoQuant research. Predictions from senior Bloomberg analyst Eric Balchunas and associate analyst Andre Yapp indicate that Bitcoin ETFs might surpass gold ETFs in assets under management within the next two years.
Despite achieving a new all-time high, Bitcoin may encounter notable volatility following the upcoming halving, warns Paul Eisma, head of options trading at XBTO Futures. He emphasizes the simultaneous pressure from the halving’s deflationary supply impact and the persistent demand shock from ETFs, with options market indicators pointing to a range of $55,000–$85,000 and implied volatility around 65% by December 2024.
