Bitcoin tops US$60,000, approaches all-time high

LONDON: Bitcoin passed the US$60,000 mark on Wednesday (Feb 28) approaching its all-time high and continuing its unbridled rise since the approval of a new type of investment indexed to the cryptocurrency.

Bitcoin traded as high as US$63,299, closing in on its all-time high of US$68,991 - struck in November 2021 and some analysts believe is now within reach.

Since their approval on Jan 10 by US securities regulators, exchange-traded funds (ETFs) indexed to bitcoin have theoretically enabled a wider public to invest in the cryptocurrency without having to hold it directly. The funds themselves, however, do invest in the digital currency.

The expected approval of the new investment product had contributed in recent months to a rise in its price, which had largely fallen by the end of 2022 following the bankruptcy of several crypto giants.

The US launch of ETFs or ETPs (exchange-traded products) has "injected a fresh wave of optimism, propelling trading volumes and spotlighting crypto-linked firms", notes Mikkel Morch of specialist fund ARK36.

The instruments are comparable to stocks or mutual funds as far as accessibility to everyday investors.

Some investors eager to recoup their bets had initially triggered a wave of mass withdrawals from the GBTC (Grayscale Bitcoin Trust) fund, once it had been converted into an ETF.

But once the selling fever subsided, flows into US bitcoin ETFs, such as that offered by asset management giant BlackRock, increased.

Exchange-listed cryptoasset-linked investment products have attracted around US$5.7 billion since the start of the year, according to calculations by asset manager CoinShares published on Monday.

As further evidence of "the growing institutional endorsement that's fuelling this rally"