Volatility Continues, As Bitcoin Prices Surge After Decline, Nearing $70,000

Volatility Continues, As Bitcoin Prices Surge After Decline, Nearing $70,000

The price of the capricious asset is up almost 200 per cent from one year ago.

PTIUpdated: Wednesday, March 06, 2024, 04:03 PM IST
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Representative image | File

 Bitcoin briefly hit an all-time high Tuesday - with the world's largest cryptocurrency surpassing USD 68,800, according to CoinMarketCap. That's just above bitcoin's previous record set in November 2021.

The price of the volatile asset is up almost 200 per cent from one year ago. Gains for bitcoin have piled up over recent months - largely due to the excitement leading up to and following regulatory approval of spot bitcoin exchange traded funds, or ETFs, earlier this year.

Analysts credit the latest surge to the growing popularity of this new way to invest combined with building anticipation for a scheduled bitcoin "halving" next month.

Drastic swings in short periods

Bitcoin has a history of drastic swings in price - which can come suddenly and happen over the weekend or overnight in its 24/7 trading.

Bitcoin rocketed from just over USD 5,000 at the start of the pandemic to its November 2021 peak of nearly USD 69,000, in a period marked by a surge in demand for technology products. Prices fell back to earth during an aggressive series of Federal Reserve rate hikes aimed at taming inflation and then the 2022 collapse of crypto exchange giant FTX, which left a significant scar on the public's confidence in the industry.

Cooling inflation drives people back to Bitcoin

At the start of last year, a single bitcoin could be had for less than USD 17,000. Investors, however, began returning in large numbers as inflation started to cool. And 2023's collapse of prominent tech-focused banks actually led more investors to turn to crypto as they bailed out of positions in Silicon Valley start-ups and other risky bets.

Despite the recent excitement around bitcoin, experts still maintain that crypto is a risky bet with wildly unpredictable fluctuations in value. In short, investors can lose money as quickly as they make it.

As of 15.47 IST the rate of the crypto currency stood at USD 66,392.10.

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