The price of the world's largest cryptocurrency, Bitcoin, briefly hit a new all-time high of more than $69,000.
It surpassed the previous record set in November 2021 – though by 2022 Bitcoin's value had sunk to $16,500. The new surge in price has been spurred by US finance giants pouring billions into buying bitcoins.
The cryptocurrency rose to around $69,200 shortly after 15:00 GMT on Tuesday, before falling back. It was trading around $62,185 by 21:00 GMT. Bitcoin's value has spiked by more than 50% over the last month, according to cryptocurrency market data platform CoinMarketCap.
Carol Alexander, professor of finance at Sussex University, said its price could go higher than its new record but warned that crypto was “notoriously volatile.”
“Too often in the past the price crash was timed so that ordinary investors buying Bitcoin during the bubble are the ones who lose out,” she told the BBC. The new record represents another dramatic moment in Bitcoin's turbulent history.
It was invented in 2009 by a person or persons calling themselves Satoshi Nakamoto – their true identity remains a mystery. Conceived as a means to create money for the internet, its roots lay in an anti-establishment ethos encouraging people to live free from the existing power structure of financial institutions and governments.
However, its new all-time high value has come about precisely because those establishment firms have been pouring billions of dollars into acquiring it. That has been made possible because, in January 2024, US regulators reluctantly approved several spot Bitcoin Exchange-Traded Funds (ETFs).
That allowed giant investment firms like Blackrock, Fidelity and Grayscale to sell products based on the price of Bitcoin. Between them, they have been buying hundreds of thousands of bitcoins, rapidly driving up their value.
Prof Alexander told the BBC these entrants “are attracting institutional investors into Bitcoin and they are putting a considerable upwards pressure on price.” But she added Bitcoin's “halving” event, expected to take place in April, may also influence the cryptocurrency's value.
“In the past, these events have been accompanied by price surges,” she said.
Wild fluctuations
For many holders of Bitcoin, this will be a moment to celebrate – as their own wealth will have risen a great deal. But history suggests they should be prepared for that to change.
Bitcoin's value tumbled to 18-month lows of nearly $20,000 in June 2022 as investors sought to cut ties with riskier investments amid a gloomy global economic outlook.
The cryptocurrency's price slumped further later that year when FTX – the huge cryptocurrency exchange founded by so-called “king of crypto” Sam Bankman-Fried – collapsed into bankruptcy in November 2022.
Its peaks and troughs continued throughout 2023, but it managed to climb back up to trade above $40,000 towards the end of the year. It is not just companies and individual investors who have been tracking those fluctuations closely.
In Central America, El Salvador's president Nayib Bukele has embraced the cryptocurrency. The Bitcoin-loving leader has spent more than $100m of his developing nation's public money on buying almost 3000 bitcoins over the last few years.
His investment is now worth around 60% more than he paid for it. Although no public records have been released on the specifics.
— CutC by bbc.com
