new york
CNN
—
Bitcoin surged to an all-time high on Tuesday, snapping a more than two-year slump that had called into question the future of the entire cryptocurrency ecosystem.
Bitcoin, the world's oldest and by far the largest digital currency, was trading above $69,000 on Tuesday morning, surpassing its previous all-time high of $68,789 recorded on Nov. 10, 2021, according to CoinMarketCap.
Over the past few months, bitcoin's price has rallied after U.S. regulators approved exchange-traded funds tracking the digital asset, giving more traditional investors an opportunity to add the cryptocurrency to their portfolios.
The approval required years of lobbying by cryptocurrency companies, and was given reluctantly by the Securities and Exchange Commission after a court ruled that regulators' reasons for rejecting the Bitcoin ETF application were “arbitrary and capricious.”
The first 11 “spot” bitcoin ETFs, which track the asset's real-time market price, were launched in January.
In just one month, ETFs have spurred more than $4.2 billion in net new inflows, according to Bloomberg.
ETFs are investment tools that trade like stocks while tracking a series of assets. Part of the appeal of Bitcoin ETFs is that they allow investors to invest in Bitcoin through a regular brokerage, without having to set up a digital wallet through a cryptocurrency exchange.
Bitcoin is the bellwether for the entire $2 trillion crypto industry, and its reputation has been hit by a series of negative headline-grabbing events, including high-profile bankruptcies of exchanges and lenders, volatile price fluctuations and the indictment of former crypto celebrity Sam Bankman-Freed, who was convicted in November of stealing billions of dollars from customers at his own FTX exchange, which collapsed in late 2022.
“To fully appreciate this new record, one must recognize the series of events that have fundamentally shaken the cryptocurrency market in 2022 and 2023 and marvel at Bitcoin's ability to always bounce back from adversity,” Antoni Trenchev, co-founder of crypto lending firm Nexo Capital, said in a statement on Tuesday.
Bitcoin, which accounts for more than half of all cryptocurrencies in circulation, has risen more than 200% over the past 12 months, according to CoinMarketCap.
Bitcoin's rise has also been fueled by crypto enthusiasts hoping for further gains following an event this spring known as the “halving.” Roughly every four years, the number of bitcoins in circulation is halved. This is a built-in feature of the cryptocurrency, which is finite by design. As bitcoin approaches scarcity, its value is expected to rise.
Trenchev said the timing of Bitcoin's new record was notable because the cryptocurrency typically hits new highs after a halving, but the surge in ETFs fueled the rally.
“This could mean an earlier, sharper and shorter-lived bull market followed by a longer and more painful recession,” he said.
