In a whirlwind surge, Bitcoin has shattered its previous records, soaring to a staggering nearly $73,000 (£57,000) per unit, marking yet another milestone for the volatile digital currency.
The cryptocurrency hit a fresh high of $72,720 as of Monday evening having last week overtaken its previous November 2021 high of nearly $69,000.
Fueling this meteoric rise, the UK’s financial watchdog signaled its openness to the trading of cryptocurrency-backed securities, announcing its tacit approval for investment exchanges to establish a dedicated market segment for cryptoasset-backed exchange-traded notes (cETNs). These financial instruments, akin to stocks in tradability, received a nod from the Financial Conduct Authority (FCA), albeit with a stern caveat: they are not to be peddled to retail investors or the general public.
“The FCA continues to remind people that cryptoassets are high risk and largely unregulated. Those who invest should be prepared to lose all their money,” cautioned the regulatory body in a solemn declaration.
The ascent of Bitcoin has found further propulsion this year with the green light from the US financial overseers for exchange-traded funds (ETFs) tethered to the cryptocurrency. Yet, amidst these nods of approval, skepticism persists, notably voiced by Gary Gensler, chair of the Securities and Exchange Commission, who branded Bitcoin in January as a “speculative, volatile asset,” often implicated in illicit activities such as ransomware and terrorist financing.
Adding to the speculative fervor swirling around Bitcoin is the looming prospect of a “halving,” a periodic event in which the issuance of new bitcoins is slashed, effectively curbing supply and, in turn, buoying prices.
Neil Wilson, chief analyst at brokerage Finalto, hailed the FCA’s move as a “positive” signal for the cryptocurrency market. However, he tempered enthusiasm with a dose of caution, noting that the historic “parabolic” surges in Bitcoin’s value often herald sharp pullbacks, though, he admitted, predicting such fluctuations in the realm of Bitcoin has become an increasingly daunting task.
“With Bitcoin, there is a question of the amount of spare cash sitting around that can be allocated to it,” Wilson pondered, encapsulating the lingering uncertainty surrounding the enigmatic digital asset.