Bitcoin briefly rallied to a record high on Friday in volatile trading, as crypto mania continued to sweep through the investment community.
The leading cryptocurrency topped the $70,000 mark for the first time, boosted by investor demand for new U.S. spot exchange-traded crypto products and expectations for global interest rates to fall.
It rose to as high as $70,105 before quickly dropping, and was last trading at $68,317.72.
Billions of dollars have flowed into ETFs in the past few weeks, and the market is getting extra support from an outlook that includes an upgrade to the ethereum blockchain platform, home to the second-largest cryptocurrency ether , and a bitcoin “halving” event, which slows the flow of bitcoin minting, in April.
Still, some say it’s hard to shake off the speculative nature of these assets. After hitting a record high on Tuesday, bitcoin sharply reversed course and fell more than 10% back below the $60,000 level.
“Navigating old highs is notoriously tricky and the bitcoin dam doesn’t tend to burst at the first time of asking,” said Antoni Trenchev, co-founder of crypto lending platform Nexo.
“Volatility defines bitcoin bull markets, and 2024 will be littered with sudden and gut-wrenching 10%-20% plunges.”
The approval of 11 spot bitcoin ETFs by the U.S. Securities and Exchange Commission in late January marked a watershed moment for the industry, following an 18-month-long crypto winter plagued by a string of high-profile corporate bankruptcies and scandals.
Even institutional investors, who once shunned crypto due to its sharp, wild moves, have begun committing long-term money, which analysts say could help sustain the latest leg of this rally.
Net flows into the 10 largest U.S. spot bitcoin funds reached $2.2 billion in the week ended March 1, with more than $2 billion of that going into BlackRock’s iShares Bitcoin Trust, according to LSEG data.
The recent optimism over bitcoin has also spilled over to other digital tokens, particularly ether, which ranks second behind bitcoin in terms of total market value, up more than 60% since the start of the year.
Ether was last up 1.62% at $3,939.84. Crypto stocks were also up on Friday, with shares of Coinbase last higher at 8.2%, and crypto miners Riot Platforms and Marathon Digital up 5.1% and 9.6%, respectively.
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