Bitcoin rises after rapid climb to new record high of $69,202

Cryptocurrencies rally in volatile trade as investors embrace digital assets
Bitcoin rises after rapid climb to new record high of $69,202
Ether ranks second behind Bitcoin in terms of total market value

Bitcoin and Ether experienced significant rallies on Wednesday, reflecting the ongoing frenzy surrounding cryptocurrencies within the investment community. While Bitcoin saw a surge of 4.47 percent to $66,654, Ether jumped nearly 8.03 to $3,851.16 by 11:07 GMT, underscoring the continued appeal of digital assets despite their volatile nature. Earlier, Bitcoin rose by as much as 6.8 percent to a session high of $67,645.

On Tuesday, Bitcoin dropped 6 percent from an earlier record high above $69,202.

Factors driving growth

Bitcoin has already surged 55 percent this year so far due to investors pouring money into U.S. spot exchange-traded crypto products and the anticipation of global interest rate reductions. Exchange-traded funds (ETFs) saw a spike in investments in the past few weeks which supported the crypto market. Moreover, an outlook that includes an Ethereum upgrade and the anticipated Bitcoin halving event has further pushed crypto prices up.

Furthermore, institutional investors, who were once hesitant to enter the crypto market due to its volatility, have now begun committing long-term investments, further fueling the rally. The recent approval of 11 spot Bitcoin ETFs by the U.S. Securities and Exchange Commission has marked a significant milestone for the industry.

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Challenges and volatility

The recent optimism over Bitcoin has positively affected other digital tokens, particularly Ether. Ether ranks second behind Bitcoin in terms of total market value and has seen over a 60 percent increase since the start of the year.

Despite the positive momentum, cryptocurrencies remain subject to speculation and volatility. After hitting the record high on Tuesday,  followed by a 10 percent decline below the $60,000 level, underscores the unpredictable nature of digital assets like Bitcoin. Experts warn of the erratic phase the market typically observes after reaching record highs, with a pump-and-dump scenario prevalent.

While Bitcoin’s current price surge is impressive, some analysts caution that it still falls short of its all-time high in real terms, adjusted for inflation. Analysts note that considering the increase in consumer prices since the previous peak, Bitcoin would need to surpass $75,000 in today’s prices to reach a new high in real terms.

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