Cryptobitcoin
Mar 05, 2024 07:26 AM EST
After the rally paused over the weekend, Bitcoin surged to start the week, moving even closer to its all-time high.
According to Coin Metrics, the leading cryptocurrency was last seen up 9% at $68,635.20. It hit a high of $68,848.62 at one point, the highest since November 2021, the last time it broke the record. Ether increased by almost 5% to $3,650.59.
Both bitcoin and ether experienced their strongest week in nearly a year, with bitcoin gaining approximately 21% and ether rising by 16%. However, their momentum slowed over the weekend as the market reacted to two days of significant outflows from the Grayscale Bitcoin Trust (GBTC), which were counterbalanced by inflows into newly established bitcoin exchange-traded funds (ETFs).
Antoni Trenchev, co-founder of the crypto exchange Nexo, noted, "With the birth of these nine new ETFs, significant market movements now tend to occur during the regular trading week rather than on weekends."
He added, "Today's market activity may resemble the pattern observed early last week when bitcoin saw a $10,000 surge within a couple of days. We're in a similar environment where a brief period of consolidation could precede significant price movements, fueled by the robust demand for these new spot ETFs."
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Bitcoin's upward movement had a ripple effect on other cryptocurrencies, particularly meme coins. Dogecoin surged by 32%, while Shiba Inu coin skyrocketed by 95%. Analysts view this surge as a sign that retail investors, who had been relatively absent during the recent crypto rally, are beginning to reenter the market.
Last week, the trade volume of meme tokens reached its highest level since late 2021, as reported by crypto data provider Kaiko.
Certain crypto-related stocks also benefited from the surge in bitcoin. Companies such as Coinbase and Microstrategy experienced gains of 11% and 23.6%, respectively.
However, mining companies did not participate in the rally, as concerns about the short-term impact of the upcoming halving in April weighed on investors. CleanSpark and Cipher Mining both dropped more than 7%, while Iris Energy and Marathon Digital each saw declines of nearly 5%, and Riot Platforms slid by almost 7%.
While bitcoin may continue to rise in the near future, some analysts believe that it will likely drop off over the following few weeks as unrealized profit margins get closer to extremely high levels. Approximately $42,700 is the current realized price of bitcoin, according to CryptoQuant.
However, long-term investors are optimistic that the mix of rising bitcoin demand brought forth by the new U.S. ETFs will drive the price of bitcoin to a new all-time high, and a tighter supply is anticipated following the April halving event.
The tech-heavy Nasdaq Composite, which became the final major stock index to end at a record high this year on Friday, has also been making inroads into the cryptocurrency space.
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