After a week of anticipation, Bitcoin finally set its own all-time high.
The cryptocurrency briefly touched a record-breaking US$69,210 (AU$106,400) this morning, before dropping a slight 6 percent to US$63,087 (AU$96,980) at the time of writing.
Bitcoin has soared 45 percent since the start of the year, rising steadily from US$42,600 (AU$65,400) in January to reach its record all-time high in March. Pav Hundal, lead analyst at Aussie crypto exchange Swyftx, attributes Bitcoin’s rise to “sheer gravitational force of institutional demand.”
“The market is following in its slipstream… with interest strongly focused on Bitcoin and memecoins, as well as AI-related projects,” Hundal adds.
Bitcoin’s last peak was US$68,980 (AU$106,070) in November 2021. The peak was at the height of the crypto and NFT bull run, just six months before Terra Luna’s crash and a year before FTX’s stunning collapse that sent BTC’s price plunging nearly 65 percent throughout 2022.
Bitcoin’s market cap currently stands at US$1.2 trillion (AU$1.84 trillion).
Bitcoin Halving: Boom or bust?
With Bitcoin’s historic fourth Halving event just a month away, the crypto community is also seeing heightened optimism towards BTC.
The Bitcoin Halving refers to when the rewards to Bitcoin miners get cut in half, reducing the rate in which new Bitcoins are released into circulation. The Halving event is intended to limit the supply of the currency to maintain scarcity and thus, Bitcoin’s value.
“With a diminished supply of new coins entering circulation, there is less selling pressure from miners. Historically, this scarcity has been associated with bullish market trends,” Caroline Bowler, CEO of BTC Markets, tells The Chainsaw.
According to BitPay, in May 2020, after Bitcoin’s third Halving, BTC rose from US$8,500 (AU$13,000) to nearly US$9,700 (AU$14,900) in three days.
“This event is hard coded into Bitcoin’s protocol and is designed to limit the total supply of Bitcoin to 21 million,” Bowler adds.
However, at the same time, an expert from Oppenheimer told CNBC that investors should be wary of a possible price correction.
“The rise is so much so fast that we are cautious about a correction,” Owen Lau said to CNBC. “But longer term, there are still catalysts supporting the positive price action.”
Ethereum’s rally
Following Bitcoin’s dramatic surge, Ethereum, the world’s second-largest cryptocurrency by market cap, has also seen a rally in the past week.
Since the start of the year, Ethereum has risen as much as 47 percent from US$2,300 (AU$3,580) to US$3,400 (AU$5,220) at the time of writing.
Ethereum’s price rise also takes place days before the crypto network’s upcoming Dencun upgrade, which aims to make transactions faster and cheaper.
“The Dencun upgrade is a big step forward and we’re watching to see what impact it has on big Layer 2 projects like Arbitrum, Polygon and Optimism. There could be a strong halo effect,” Hundal explains.
However, around the same time, Ethereum founder Vitalik Buterin was found to have sold approximately US$100,000 (AU$154,000) in ETH, raising concerns about the potential impact on Ethereum’s price post-upgrade.
The crypto community is bubbling with optimism and anticipation at the moment, but as always: be cautious and conduct proper due diligence before investing.
