Bitcoin demonstrated resilience on Wednesday, staging another rally shortly after a temporary dip from its recent all-time high, reinforcing bullish sentiments among investors in the world’s largest cryptocurrency.
During the Asian session, Bitcoin surged by 5%, reaching an intraday peak of $66,540 in volatile trading—only slightly below Tuesday’s record of $69,202. The cryptocurrency remained 4% higher at $65,946 as of the latest update.
This remarkable ascent, marking a 55% increase in the year to date, has been propelled by substantial investments in U.S. spot exchange-traded crypto products and growing speculation about a potential global decline in interest rates.
Lennix Lai, Global Chief Commercial Officer at crypto exchange OKX, attributed the ongoing rally to factors such as ETF flows and anticipation surrounding an upcoming Ethereum upgrade and Bitcoin “halving,” which slows the rate of new Bitcoin creation.
“The trend also indicates an elevated level of mainstream acceptance of bitcoin, perhaps more than ever before,” Lai noted.
The approval of 11 spot Bitcoin ETFs by the U.S. Securities and Exchange Commission in late January marked a pivotal moment for the industry. This endorsement followed an 18-month crypto winter, characterized by high-profile corporate bankruptcies and scandals.
Even institutional investors, previously cautious due to Bitcoin’s notorious volatility, have started committing long-term funds. This shift is seen as a contributing factor to sustaining the current phase of the cryptocurrency’s rally.
Bitcoin’s positive momentum has spilled over to other cryptocurrencies, with Ethereum, the second-largest, also experiencing a more than 60% increase in value for the year.
As of the latest data, Ethereum was 6.4% higher at $3,750.
Despite the optimism, some analysts caution against overlooking the speculative nature of these assets. Following Tuesday’s record high, Bitcoin experienced a sharp reversal, dropping more than 10% below the $60,000 level.
“That looks like classic bitcoin behavior – it chews you up then spits you back out,” remarked Matt Simpson, Senior Market Analyst at City Index. “A pump and dump to previous record highs wiped out some weaker hands, and I suspect we’re now in the volatile and erratic phase we usually see when it reaches a record high.”
