Bitcoin has jumped 57.77 per cent so far this year to reach a market capitalisation of $1.31 trillion. Bloomberg
Bitcoin has jumped 57.77 per cent so far this year to reach a market capitalisation of $1.31 trillion. Bloomberg
Bitcoin has jumped 57.77 per cent so far this year to reach a market capitalisation of $1.31 trillion. Bloomberg
Bitcoin has jumped 57.77 per cent so far this year to reach a market capitalisation of $1.31 trillion. Bloomberg

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Bitcoin tops $68,800 but falls short of record high

Analysts remain positive that the digital token can surpass its all-time high this week

Felicity Glover
Felicity Glover

March 05, 2024

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Bitcoin fell agonisingly short of its all-time high of about $69,000 on Tuesday morning, hitting $68,818.27 before losing ground in volatile trading as investors booked profits.

The cryptocurrency, the world's biggest by market capitalisation, was trading at $66,821.74 as of 12.55pm UAE time, according to CoinDesk data.

However, analysts including Markus Thielen, head of research at 10x, remains positive that Bitcoin will reach its all-time high this week.

In a research note shared by the UK-based company in a post on X, Mr Thielen said that “everybody will be astonished by Bitcoin’s price action this week”.

“Price action during the weekend is always important to follow and while attempts have been made to [liquidate] leveraged long positions, there are no sellers,” Mr Thielen was quoted by CoinDesk as saying.

So far this year, the digital token has jumped 57.77 per cent to reach a market capitalisation of $1.31 trillion, as inflows into spot Bitcoin ETFs accelerated. The total market cap of the cryptocurrency sector is up 5.7 per cent at $2.64 trillion.

Bitcoin hit a record high of $68,991.85 in November 2021, shortly before inflation and interest rates took off during the Covid-19 pandemic.

In November 2022, the cryptocurrency plummeted below $16,000 as the sector entered a “crypto winter”, resulting in the collapse of platforms including Celsius, Three Arrows Capital and Sam Bankman-Fried's FTX.

The collapse of FTX, once valued at $32 billion, is the highest-profile cryptocurrency exchange failure to date, after traders pulled $6 billion from the platform in three days and rival exchange Binance abandoned a rescue deal.

However, in January, the US Securities and Exchange Commission approved the country's first spot Bitcoin ETFs, clearing the way for them to be traded on the New York Stock Exchange, Cboe Global Markets and the Nasdaq.

The SEC's ETF approval and the planned Bitcoin halving in April has fuelled the current rally, which has spread across smaller tokens and meme coins.

Ethereum, the second-biggest cryptocurrency by market cap, is currently trading at $3,696.57.19, its highest price since January 2022, while Shiba Inu has surged 42.24 per cent to hit 0000.3871.

“Retail is hearing about the large crypto run-up from the Bitcoin ETFs, and has re-entered the market, buying all the cheap coins,” Jordi Alexander, founder of digital-asset trading firm Selini Capital, told Bloomberg.

“PEPE and WIF are some of the new entrants of this cycle compared to last, as well as BONK. DOGE and SHIB getting a bit of comeback also – the key question is: Do dogs keep the lead, or is there a faster animal?”

How to play the stock market recovery in 2021?

If you are looking to build your long-term wealth in 2021 and beyond, the stock market is still the best place to do it as equities powered on despite the pandemic.

Investing in individual stocks is not for everyone and most private investors should stick to mutual funds and ETFs, but there are some thrilling opportunities for those who understand the risks.

Peter Garnry, head of equity strategy at Saxo Bank, says the 20 best-performing US and European stocks have delivered an average return year-to-date of 148 per cent, measured in local currency terms.

Online marketplace Etsy was the best performer with a return of 330.6 per cent, followed by communications software company Sinch (315.4 per cent), online supermarket HelloFresh (232.8 per cent) and fuel cells specialist NEL (191.7 per cent).

Mr Garnry says digital companies benefited from the lockdown, while green energy firms flew as efforts to combat climate change were ramped up, helped in part by the European Union’s green deal. 

Electric car company Tesla would be on the list if it had been part of the S&P 500 Index, but it only joined on December 21. “Tesla has become one of the most valuable companies in the world this year as demand for electric vehicles has grown dramatically,” Mr Garnry says.

By contrast, the 20 worst-performing European stocks fell 54 per cent on average, with European banks hit by the economic fallout from the pandemic, while cruise liners and airline stocks suffered due to travel restrictions.

As demand for energy fell, the oil and gas industry had a tough year, too.

Mr Garnry says the biggest story this year was the “absolute crunch” in so-called value stocks, companies that trade at low valuations compared to their earnings and growth potential.

He says they are “heavily tilted towards financials, miners, energy, utilities and industrials, which have all been hit hard by the Covid-19 pandemic”. “The last year saw these cheap stocks become cheaper and expensive stocks have become more expensive.” 

This has triggered excited talk about the “great value rotation” but Mr Garnry remains sceptical. “We need to see a breakout of interest rates combined with higher inflation before we join the crowd.”

Always remember that past performance is not a guarantee of future returns. Last year’s winners often turn out to be this year’s losers, and vice-versa.

Updated: March 05, 2024, 12:10 PM
Personal financeBitcoinCryptocurrency