BITCOIN PRICE HITS NEW RECORD HIGH ABOVE $71,000

Mon 11 March 2024:

The price of Bitcoin hit a new record level of $71,500 on Monday, increasing by 2.7% on a daily basis.

Closing last week at around $69,000, the biggest cryptocurrency hit the $71,000 level, and it is at around $71,550 as of 11.30 a.m. (GMT0830).

Bitcoin has been on an upward trend since mid-January, related to the US Securities and Exchange Commission’s decision to allow spot Bitcoin ETFs or exchange-traded funds.

With this move, investors are able to trade Bitcoin without owning it.

Bitcoin’s market cap reached $1.4 trillion, according to coinmarketcap data, while its 24-hour transaction volume was at $47 billion as of GMT0830.

What is bitcoin?

Bitcoin was created in 2008 by Satoshi Nakamoto, the pseudonymous author of a white paper that established the concept of a digital currency that allows “online payments to be sent directly from one party to another without going through a financial institution”.

The “double spend” problem of someone duplicating or falsifying a digital token – which cannot be prevented by a separate institution policing the system, because that would go against the underlying principles of bitcoin – is solved by having transactions recorded on a universally accessible ledger called a blockchain.

This is all secured by cryptography, where transactions are protected by a form of encryption called public-private key encryption. This enables a transaction to take place without a financial institution sitting in the middle of it.

Transactions are placed on the blockchain by bitcoin “miners”, who get to pack them into blocks that are linked (or “chained”) together, by solving a cryptographic puzzle using specialised hardware. These miners are rewarded with newly created bitcoins.

Why has it risen in price this time?

A major factor in bitcoin’s rise since the start of the year has been the approval by the US financial regulator in January of exchange-traded funds [ETFs] – a basket of assets that can be bought and sold like shares on an exchange – that track the price of bitcoin.

The ETF announcement shows there is now “institutional maturity” in the cryptocurrency market, according to Jeff Billingham, the director of strategic initiatives at research firm Chainalysis. “We did not see this kind of infrastructure and trust in the market in the previous cryptocurrency bull runs,” he says.

SOURCE: INDEPENDENT PRESS AND NEWS AGENCIES

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