Bitcoin hits record level against US dollar

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The price of bitcoin has continued to surge, hitting a record level against the US dollar.

Reuters reported that overnight on Wednesday (NZT), the world’s largest cryptocurrency briefly hit a record US$69,202 (NZ$113,770) before easing back.

It comes as investors pour money into bitcoin exchange traded funds (ETFs), and on the belief that global interest rates may fall.

Paul Quickenden, chief commercial officer at local crypto firm EasyCrypto, told RNZ, the combination of factors has helped boost demand for bitcoin.

But he said the key driver was the recent move in the United States to allow ETFs, allowing the world’s biggest fund managers to buy bitcoin.

“Those ETFs have been wildly successful and broken a number of records in terms of daily volumes,” Quickenden said.

“The net result is that, on a daily basis, they are consuming – literally sucking a lot of bitcoin out of the market – and classic supply and demand has been at play, so the price has been going up.”

Quickenden said that has lifted the entire crypto ecosystem, and EasyCrypto has seen lots of new retail users coming in.

In addition to demand from institutional investors, cryptocurrency received a boost from the prospect of the US Federal Reserve cutting interest rates, encouraging investors to invest money into riskier assets.

“Equities markets and our sector, the crypto market, are looking forward to that. That means cheaper money and they start searching for higher yielding products that give them better returns,” Quickenden said.

Nathan McCauley, chief executive of crypto platform Anchorage Digital, told Reuters, that bitcoin hitting its all-time high, marked a “turning point for crypto”.

“Traditional institutions were once sitting out; today, they are here in full force as the principal drivers of the crypto bull market,” McCauley said.

– Sections of this story were first published by Reuters

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