On Tuesday, Bitcoin reached a two-year high, surpassing $68,600 and closely approaching its all-time peak as a continuous influx of funds flows into the leading cryptocurrency by market capitalization. During Asian trading hours, the digital asset experienced a nearly 7% increase, achieving a session high of $68,828, just a hair’s breadth away from its record peak of $68,999.99 established in November 2021.
The latest surge in interest comes as the Federal Reserve hints it may keep interest rates elevated for longer than expected. That’s a boon for the dollar but could weigh on the prices of other riskier assets, including cryptocurrencies.
Investors are also seeking safe havens amid uncertainty over trade policy and political turmoil in the United States and abroad, which has helped fuel the rally in the bitcoin price.
But bitcoin’s price rally this year has come despite fears of regulatory clampdowns, including from the U.S. Securities and Exchange Commission, that could dampen demand for crypto. Some analysts warn that higher interest rates could undermine the price of the digital currency by boosting inflation.
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For now, bitcoin’s meteoric rise continues, fueled by growing demand for digital assets among institutional investors and speculation ahead of the April halving event that will reduce the supply of new bitcoins. As a result, the market capitalization of the world’s first cryptocurrency has risen to over 600 billion U.S. dollars.
The price of Bitcoin has also risen due to a technology-driven productivity boom fuelled by artificial intelligence and blockchain-based business applications. That’s helping drive growth in the tech-heavy Nasdaq Composite, which hit a record on Friday and was the last of the major stock indexes to do so this year.
A growing number of investors are also seeking exposure to the crypto space via bitcoin exchange-traded funds, or ETFs. However, the products vary widely in terms of fees, roll premiums, and management fees, so investors should carefully read the prospectus before investing.
Bitcoin is the world’s first cryptocurrency, a digital medium of exchange that operates independently from any government or central bank. It is decentralized, encrypted, and secure, providing a global, censorship-resistant means for financial exchange. One bitcoin is worth roughly $6,000 and can be bought and sold on exchanges like GDAX, BitStamp, and Coinbase. It can also be purchased directly from other users through marketplaces and auction sites. A single bitcoin is divisible into smaller units called satoshis, named after the digital currency’s creator. A satoshi is worth 0.00000001 bitcoin. Those buying Bitcoin can use cash, credit and debit cards, or other cryptocurrencies. They can also buy bitcoin futures contracts or invest in ETFs that track the currency’s price. They can also buy bitcoins from other people using payment apps like Venmo or BitPay. There are hundreds of other cryptocurrencies on the market, too. Some have been created as jokes or for speculative purposes. Others are used as money services for small businesses and consumers.