Bitcoin has gone parabolic lately, soaring some 70 per cent this year and surpassing November 2021′s all-time high.
Multiple catalysts have driven the rally.
Scarcity has long been seen as a key factor supporting Bitcoin, and next month sees its fourth “halving”, with production about to be cut 50 per cent. Bitcoin rallied in the months following its last halving in May 2020, and speculators are betting on another price surge.
The decision by UK regulators to give the green light to exchange-traded notes (ETNs) tied to Bitcoin has also helped sentiment. However, the real game-changer has been January’s launch of multiple Bitcoin exchange-traded funds (ETFs) in the US, which has given the cryptocurrency a new respectability.
Do something with your savings before rates fall further
What are my mortgage options when coming off a fixed rate on a loan that has just 18 months to run?
Do analysts share Mark Zuckerberg’s preference for ‘masculine energy’?
Donald Trump’s reprieve for TikTok might only prove to be a short-term solution for the Chinese app
BlackRock’s bitcoin ETF already has more than $14 billion in assets under management, having become the fastest-growing ETF in history. In total, the 10 Bitcoin ETFs have over $55 billion in assets, a level of success that Bloomberg ETF analyst Eric Balchunas describes as “simply absurd”.
[ Bitcoin's real value is based on the greater fool theoryOpens in new window ]
[ Bitcoin bulls are not the bigger foolsOpens in new window ]
Sceptics might say Bitcoin’s soaring price is similarly absurd. Nevertheless, says Deutsche Bank’s Jim Reid, “whether you’re a cynic or a convert, whether you think it’s cheap or in a bubble, what’s clear is that bitcoin is becoming increasingly institutionalised”.
- Sign up for Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Find The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
