Bitcoin and Ethereum hit record highs on surging investor interest

Bitcoin and Ethereum hit a new record high in trading overnight as investors surge back into cryptocurrencies.

Bitcoin hit a high of $68,525 at 11 p.m. Monday before investors took profits and drove the price down slightly during the day. Bitcoin’s previous high was just below $67,000 on Oct. 20. Ethereum also hit a record high of $4,840, the first time the cryptocurrency has passed $4,800.

The factors driving the price increase in bitcoin include an increase of investors to the broader cryptocurrency space in October as noted by Coinbase Global Inc. in its earnings report today, ongoing institutional support and concerns over inflation in the U.S. amid ongoing supply chain issues.

While overall investor interest after a somewhat tepid summer is driving cryptocurrency as a whole, broader institution interest is being driven by professional products linked to the likes of bitcoin. ProShares ETF, a U.S. Securities and Exchange Commission-approved bitcoin future exchange-traded fund, made its debut last month before the October high and continues to drive momentum in the market.  Euronews notes that Australia’s regulator also approved spot ETFs in bitcoin and Etherum last week, indicating more institutional investments will become online.

The rise of Ethereum, which also helps drive overall interest in cryptocurrency, is linked to the rise of decentralized finance and non-fungible tokens.

“Bitcoin’s new all-time high of over $68,000 is showing that interest is growing stronger and more widespread,” Alex Adelman, chief executive officer and co-founder of bitcoin rewards app Lolli Inc., told SiliconANGLE. “As the bitcoin rally holds steady, a surging price is indicative of the growing number of institutions and investors that understand bitcoin’s profound importance as a store of value that will transform the way that people and companies transact on a global scale with unprecedented security.”

Jodie M Gunzberg, managing director of cryptocurrency tracking service CoinDesk Indexes, attributed the rise in bitcoin and Etherrum to inflation.

“Investing in BTC and ETH is a more direct and concentrated way for capturing inflation risk, meaning there is more inflation beta per dollar invested,” Gunzberg explained. “Bitcoin also does well with inflation relative to other assets, even commodities that are also priced in dollars. It’s a great bang for your buck to use BTC and ETH for inflation protection.”

The upside is notable. “BTC and ETH are priced in dollars so their sensitivity to inflation is high,” Gunzberg noted. “A 1% increase in inflation results in a 183% increase in return of ETH over three years. This is triple the inflation beta of bitcoin, which is already about 4.5x commodities.”

Bitcoin was softer in late trading with the price sitting at $67,000 as of 9:37 p.m. EST.

Image: FreeIMG

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