06 March 2024 , 09:14
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The price of bitcoin has reached a new all-time high, with more people wanting to buy it.
It went over the 69,000 US dollar (£54,200) mark during the day. This is even higher than its previous best in November 2021. Bitcoin is now allowed to be part of more normal ways to invest money in the US. The new surge in price has been spurred by US finance giants pouring billions into buying bitcoins.
The US Securities and Exchange Commission said yes to the first bitcoin exchange-traded funds (ETFs) in early January. An ETF is follows the price of assets like gold, bonds, or cryptocurrencies. It lets people put money into these assets without actually buying them.
But the US regulator is still not sure about cryptocurrencies. They said they "did not approve or endorse bitcoin" when they made their decision. Even so, lots of investors started putting money into bitcoin ETFs made by big companies like BlackRock and Fidelity.
Also, bitcoin is getting close to its next "halving" event in April. This event makes fewer new coins come out and happens every four years. Experts say that because there will be fewer new bitcoins and more people want them, the price is going up.
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Laith Khalaf of AJ Bell, said that bitcoin's price going up is part of a bigger increase in risky investments, including tech stocks. He said: "The rise in bitcoin has also been galvanised by the launch of spot ETFs in the US, which is seen as a crucial step towards integrating bitcoin and cryptocurrencies into the mainstream financial ecosystem, and potentially paving the way for a global rollout. The regulatory approval of these products also adds a layer of legitimacy to bitcoin, amidst concerns raised by policymakers, including in the UK."
But Mr Khalaf pointed out that Bitcoin is "largely driven by sentiment", saying: "If you buy some, you're relying on someone paying more than you further down the line to turn a profit. The long-term adoption of cryptocurrencies by consumers, businesses, and investors remains highly uncertain," he continued. On Tuesday afternoon, the price of bitcoin hit around 69,170 US dollars (£54,370), according to figures from crypto exchange Binance.