With the start of European trading time, bitcoin (btc) has surpassed the important milestone of $71,000, surpassing its previous all-time high set last week. This surge can be attributed to a combination of factors that have bolstered investor confidence and triggered a wave of buying activity across the cryptocurrency market. Here's a closer look at the four key factors driving this unprecedented rally.
#1 London Stock Exchange Adopts bitcoin and ethereum ETNs
As reported by Bloomberg just before the price surge, the London Stock Exchange (LSE) announced its plans to accept applications for the admission of bitcoin and ethereum exchange-traded notes (ETNs) in the second quarter of the year.
*LSE WILL ACCEPT APPLICATIONS FOR ADMISSION OF bitcoin AND ethereum ETN: BBG
– Tree News (@News_Of_Alpha) March 11, 2024
Although the exact launch date is not yet confirmed, this measure represents an important step towards the acceptance of cryptocurrencies by the main financial markets. The listing of crypto ETNs on one of the world's oldest stock exchanges underlines the growing institutional interest in digital assets and is anticipated to attract a new wave of investors to the crypto market.
#2 The impact of a short squeeze
Predictions of a short squeeze that would push bitcoin prices to new heights came true, as traditional financial portfolio manager bitcoin Munger (@bitcoinmunger) predicted on X. “We will likely start the week with a bang, courtesy of the sellers.” shorts looking to get squeezed to $70,000. New highs are coming,” Munger predicted.
We are likely to start the week with a bang, courtesy of short sellers looking to get shorted to $70,000.
New highs are approaching. TIC Tac! bitcoin?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow”>#bitcoin pic.twitter.com/OFiNmlmc9Y
–bitcoin Munger (@bitcoinmunger) March 10, 2024
This was evidenced by the liquidation of approximately $23.5 million in short positions during bitcoin's rise to $71,000, according to Coinglass. data.
#3 Tether's role in capital inflow
Over the weekend and last week new money entered the market. Leading stablecoin Tether (USDT) was minted, as on-chain analytics firm Lookonchain reported: “Tether Treasury minted 2 billion USDT again (yesterday)! And 5 billion USDT has been minted on Tron and ethereum in just one week! reported on-chain analytics firm Lookonchain.
One notable transaction involved a whale or institution receiving 261.6 million USDT from Tether Treasury and depositing it on the Binance exchange, suggesting substantial preparatory activity for major trading operations.
After #TetherTreasury minted 2B $USDTa whale/institution received 261.6 million $USDT of #TetherTreasury and deposited it in #Binance.https://t.co/ohBcxqbrzThttps://t.co/Cxs2WfFPCn pic.twitter.com/fvL7Cz5Tvv
— Lookonchain (@lookonchain) March 11, 2024
#4 Growing demand for bitcoin ETFs
The excitement surrounding bitcoin exchange-traded funds (ETFs) in the United States has been extraordinary. “bitcoin ETFs have attracted more than $7.5 billion in net new assets since their launch in the US on January 11, making many of them among the most successful ETF launches of all time” . noted Matt Hougan, CIO of Bitwise, in a memo to investment professionals.
Hougan further detailed: “At Bitwise, we have engaged with registered investment advisors (RIAs), family offices, and venture capital funds among our current buyers. Looking ahead, we are in talks with major cable houses, institutional consultants and large corporations, representing trillions of dollars in assets.”
This idea underscores a growing confidence in bitcoin ETFs as a mainstream investment option, with expectations of significant capital inflows from these entities starting in the second quarter of 2024, indicating a bullish outlook for bitcoin's future. He said: “Based on current trends, I suspect we will see our first significant flows from (major cable houses, institutional consultants and large corporations) in the second quarter of 2024.”
At the time of publication, btc was trading at $71,296.
Featured image created with DALL·E, chart from TradingView.com
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