Bitcoin rises above $70,000 for first time

Bitcoin crosses $70,000: Bitcoin surged to an all-time high on Friday amid volatile trading, extending the ongoing crypto frenzy.

Breaking through the $70,000 threshold for the first time, Bitcoin (BTC) witnessed a surge in demand fuelled by investor interest in new US spot exchange-traded crypto products and anticipations of global interest rate reductions.

The inflow of billions of dollars into ETFs over recent weeks has provided substantial backing to the market. Furthermore, the sector received a boost from the anticipation surrounding an upgrade to the Ethereum blockchain platform, host to Bitcoin's rival, Ether (ETH), and an upcoming Bitcoin "halving" event in April, which curbs the rate of Bitcoin creation.

The green light from the US Securities and Exchange Commission for 11 spot Bitcoin ETFs in late January marked a key moment for the crypto industry. This approval arrived after an 18-month period of 'crypto winter', characterised by corporate bankruptcies and scandals.

Even institutional investors, historically cautious due to the sharp fluctuations in crypto markets, are now allocating long-term capital. Analysts suggest this institutional involvement could help sustain the current upward momentum of the rally.

According to LSEG data, net inflows into the ten largest US spot Bitcoin funds totalled $2.2 billion in the week ending March 1, with over $2 billion directed towards BlackRock's iShares Bitcoin Trust.

The positive sentiment surrounding Bitcoin has spilled over into other digital assets, notably Ether, which has surged by over 60 per cent since the beginning of the year, securing its position as the second-largest cryptocurrency by market capitalization.

However, sceptics caution against ignoring the speculative nature of these assets. Despite reaching record highs earlier in the week, Bitcoin experienced a sharp reversal, plummeting by over 10 per cent and dipping below the $60,000 mark.

(With Reuters inputs)