Bitcoin (BTC) surged on Wednesday to break above $60,000, putting it within striking distance of its all-time high as enthusiasm for the world’s largest cryptocurrency reached a level last seen during a 2021 boom.
The price of the digital asset is riding a wave of excitement sparked by a series of spot bitcoin exchange-traded funds that started trading in January.
Bitcoin climbed as high as $63,900 Wednesday, touching its highest point intraday since November 2021, before dropping back to the $60,000 level amid reports that some users of the cryptocurrency exchange Coinbase (COIN) began showing a $0 balance in their accounts.
Coinbase said on its web site that “we are aware that some users may see a zero balance across their Coinbase accounts and may experience errors in buying or selling. Our team is investigating this issue and will provide an update shortly. Your assets are safe.”
Before prices pulled back, the rally had been pushing the price closer to the all-time mark of $68,789. That apex came six months before a spectacular crash in 2022.
“Ultimately, what we’re seeing is crypto is kind of rising from the ashes of the 2022 market,” Ryan Rasmussen, a senior crypto research analyst for Bitwise Asset Management.
Our assumption is that the price of bitcoin is going to achieve $125,000 by the end of 2025,” Benchmark’s Mark Palmer said.
Investors are bidding other cryptocurrencies and related stocks higher too. Year to date, the second largest cryptocurrency, ether (ETH), has outperformed bitcoin by more than 4% while the total market value for all crypto assets is up roughly 36% to $2.24 trillion, according to Coinmarketcap.
One sign of surging enthusiasm for bitcoin is the trading activity in the bitcoin ETFs that launched in January, giving everyday investors widespread exposure to the digital asset. They have logged more than $6.7 billion in net flows as of Wednesday, according to data collected by London-based fund Farside Investors.
So far this quarter, bitcoin trading volume has surpassed levels seen for the same period in every quarter of 2023. That activity has been a boon to major crypto trading venues, including Coinbase and Robinhood (HOOD). As of Wednesday, those stocks are up 18% and 26%, respectively, since the beginning of January.
Bitcoin miner Marathon Digital (MARA) and bitcoin holder Microstrategy (MSTR) have risen 34% and 53%, for the same period. MicroStrategy announced Monday morning that it acquired an additional 3,000 BTC, bringing its total investment to 193,000 BTC, which was valued at over $11 billion as of Wednesday.
Derivatives traders are also now piling into the bitcoin rally, according to Cumberland Labs analyst Christopher Newhouse.
There are roughly $25 billion of open contracts in the bitcoin futures market, according to crypto derivatives data provider Coinglass. That’s a new high for outstanding bitcoin futures bets, surpassing a mark last set in April 2021.
“In the options market, the narrative is clear,” Newhouse added. “People are bullish.”
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