Bitcoin Sets New Price Record, Surpasses Market Cap of Silver

Bitcoin has hit a new milestone, surpassing the US$72,000 mark in the early hours of Monday (March 11).

The world’s leading cryptocurrency has surpassed analysts' expectations quite a few times over the last two weeks, steadily rising as anticipation of the Bitcoin halving builds and as more investors gain exposure to the popular cryptocurrency through spot Bitcoin exchange-traded funds (ETFs), which were recently approved in the US.

“Major financial institutions are now actively involved in holding and trading BTC, catering to high-net-worth clients, thereby enhancing the significance and acceptance of digital assets within the financial industry," said research analyst Matteo Greco of Fineqia International (CSE:FNQ) in an emailed note.

"Following the introduction of ETFs, the market promptly experienced increased liquidity and trading volumes, indicating greater capital efficiency. This is further underscored by the notable increase in the average size of BTC transactions during 2024, reflecting heightened institutional activity in the market," he added.

Since spot Bitcoin ETFs were approved on January 10, Bitcoin has risen approximately 57 percent, according to data gathered from CoinDesk. The CoinDesk 20 Index (INDEXNYSEGIS:CDI20) has risen as well, jumping about 50 percent since the approval. Not only that, but the notional open interest in the Chicago Mercantile Exchange's Bitcoin futures market rose past US$10 billion for the first time on Monday, bringing it above the market cap of over 25 other cryptocurrencies.

According to CoinDesk, the Web3 community LondonCryptoClub has pegged Bitcoin’s most recent surge to the news that the London Stock Exchange will begin accepting applications for Bitcoin and Ether exchange-traded notes (ETNs) in Q2, as well as to low trading volumes and illiquidity in the Asian cryptocurrency market. The Asian session is typically the first major market to open, and price movements there can influence sentiment and trading activity in other regions.

While last week’s Bitcoin price surges were followed by swift retreats, with some retractions occurring within just 30 minutes, the most recent market activity has exhibited reduced volatility, demonstrating a more tempered and less erratic price movement. This is indicative of investors' confidence and continued institutional interest in Bitcoin.

This morning, Michael Saylor, a well-known Bitcoin commentator and the founder of tech company MicroStrategy (NASDAQ:MSTR), told CNBC’s Squawk Box that he believes that Bitcoin’s popularity will only grow, eventually diverting investments away from gold and coming to be viewed as a safer alternative to other risky assets.

Furthermore, Saylor predicted that investor interest in Bitcoin ETFs could eventually surpass that of conventional ETFs, such as the SPDR S&P 500 ETF Trust (ARCA:SPY), which tracks the S&P 500 (INDEXSP:.INX). He also forecast that Bitcoin will be integrated as an asset class within regular ETFs, not just those exclusively focused on cryptocurrencies.

Indeed, BlackRock (NYSE:BLK) is reportedly considering adding Bitcoin exchange-traded products (ETPs) to its Global Allocation Fund, a managed fund with a diverse range of assets spanning global equities and money market securities. A filing with the US Securities and Exchange Commission shows that on March 7, amendments were made to BlackRock's original August 2023 filing. BlackRock also filed an amendment to include spot Bitcoin ETPs in its Strategic Income Opportunities Fund on March 4. This fund is described as having a "flexible bond strategy."

In keeping with Saylor’s stance on Bitcoin’s long-term potential, MicroStrategy purchased 12,000 Bitcoin, worth an estimated US$821.7 million, after completing a US$800 million offering of 0.625 percent convertible senior notes. MicroStrategy is now ahead of BlackRock in terms of holdings, with 205,000 Bitcoin against BlackRock’s 195,985.

Along with increased institutional interest, Cointelegraph has also reported that Google Trends data suggests retail traders have taken a renewed interest in crypto assets, with online searches for Bitcoin rising in tandem with the number of addresses with at least US$10 worth of Bitcoin. In the context of Bitcoin, an address is a unique identifier that represents a possible recipient — or destination — for a Bitcoin transaction.

Also benefiting from the crypto boom, Ether surpassed the US$4,000 threshold, and shares of Coinbase (NASDAQ:COIN), the biggest US cryptocurrency exchange, surged 5.8 percent last Friday (March 8), closing at US$256.62. This marked the platform’s highest valuation since December 2021 and was slightly above the company's original listing price of US$250.

Over the past 24 hours, Bitcoin has recorded a 4.32 percent increase, reaching US$72,349.80 and surpassing silver in terms of market capitalization. This upward trend has been consistent, with the leading cryptocurrency demonstrating a one year surge of 199.1 percent and a year-to-date increase of 63.75 percent at the time of this writing. Over the past week alone, Bitcoin has experienced a 13.4 percent rise, contributing to its impressive overall growth.

As the crypto market continues to witness remarkable growth, experts like Max Keiser remain optimistic about Bitcoin's future prospects — the advocate tweeted, “#Bitcoin will 100 percent catch Gold. $750,000 is a done deal."

As Bitcoin surpasses yet another significant milestone, the cryptocurrency's journey continues to captivate investors, financial analysts, and observers alike. The digital asset's ability to overcome hurdles and maintain its growth trajectory underscores its resilience and potential. With an ever-evolving landscape of technological innovations, regulatory developments, and market dynamics, Bitcoin's future remains a subject of great interest and speculation.

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Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.