BITCOIN hit a fresh record high for the fourth time in six days, bolstered by record-breaking inflows into US exchange-traded funds tied to the cryptocurrency.
The world’s largest cryptocurrency reached an all-time high of US$73,664 on Wednesday (Mar 13), before paring its rise slightly to trade at around US$73,180 as of 7:50 am in New York. Meanwhile, net daily inflows into US spot Bitcoin ETFs on Tuesday topped US$1 billion, data compiled by Bloomberg show, with BlackRock’s IBIT setting its own record at US$849 million in daily flows.
“The reasons behind the rally are pretty clear. A rampant demand for the physically-backed ETFs amid a low market depth backdrop,” said Manuel Villegas, digital assets analyst at Swiss private bank Julius Baer. As issuers buy up large piles of Bitcoin to support their ETFs, the token’s overall circulating supply has begun to dwindle.
Bitcoin’s weekly issuance of roughly 6,300 tokens is “utterly dwarfed” when contrasted against the ETFs’ token demand from past weeks, Villegas said, the latter of which is about 40,000 tokens.
Other cryptocurrencies have been similarly lifted by renewed interest in the asset class. Ether traded as much as 3.3 per cent higher on Wednesday, hitting a one-day peak just shy of the US$4,092 record high it set a day earlier. BLOOMBERG
