(Newsletter)
Bitcoin jumped to a record on Wednesday, topping $ 66,000 for the first time as it rides a wave of excitement over the financial institution’s continued adoption. Bitcoin was trading at $ 66,901.30 at 10:52 a.m. ET, up 7.6%. It roared back after falling below $ 30,000 in the summer to beat its previous April record. The previous all-time high was nearly $ 64,889, according to CoinDesk. The day before, the first exchange-traded fund linked to Bitcoin aroused great interest among investors and gave the emerging field of cryptocurrencies another boost, reports the AP.
The shares of the ProShares BitCoin Strategy ETF changed hands 24.1 million times in a dazzling debut. It was another strong start on Wednesday, with a volume of over 9 million in the first hour of trading. The ETF does not invest directly in Bitcoin. Instead, it invests in the Bitcoin-linked futures market, but the industry sees the ETF bringing a new class of investors to Bitcoin. For example, someone with an old school brokerage account can buy the ETF without having to learn what a hot or cold wallet is.
Investors are increasingly interested in crypto because they are always looking for assets whose prices move independently of anything else in their portfolios. One way of thinking is that Bitcoin can offer high inflation protection to investors in particular, and some fans see it as “digital gold,” although it doesn’t have a long track record to back it up. More high-minded fans say digital assets are simply the future of finance, as transactions in a currency that is not government-committed can bypass middlemen and fees.
However, crypto still hasn’t convinced everyone. Critics say they are not yet widely used as a means of payment. Critics also criticize how much energy the cryptosystem uses, which contributes to the climate-changing emissions. The biggest threat, meanwhile, is all of the regulatory scrutiny that appears on it. For example, China made Bitcoin transactions illegal last month. U.S. regulators haven’t gone that far, but the chairman of the SEC has said the cryptocurrency world doesn’t offer enough protection for investors. Cryptocurrencies are also notorious for their sharp fluctuations in price. The last time Bitcoin hit a record high, the price fell by half in about three months. (Read more bitcoin stories.)
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