Bitcoin Price Skyrockets Past $71,000: 4 Key Reasons

With the start of the European trading hour, Bitcoin (BTC) has surged past the significant milestone of $71,000, exceeding its previous all-time high set just last week. This surge can be attributed to a combination of factors that have bolstered investor confidence and triggered a wave of buying activity across the cryptocurrency market. Here’s a closer examination of the four key factors driving this unprecedented rally.

Reported by Bloomberg just prior to the price surge, the London Stock Exchange (LSE) has announced its plans to accept applications for the admission of Bitcoin and Ethereum Exchange-Traded Notes (ETNs) in the second quarter of the year.

*LSE TO ACCEPT APPLICATIONS FOR BITCOIN, ETHEREUM ETN ADMISSION: BBG

— Tree News (@News_Of_Alpha) March 11, 2024

While the exact launch date remains unconfirmed, this move signifies a major step towards mainstream financial markets’ acceptance of cryptocurrencies. The inclusion of crypto ETNs on one of the world’s oldest stock exchanges underscores the growing institutional interest in digital assets and is anticipated to attract a new wave of investors to the crypto market.

Predictions of a short squeeze propelling Bitcoin prices to new heights came to fruition, as forecasted by traditional finance portfolio manager Bitcoin Munger (@bitcoinmunger) on X. “We likely start the week off with a bang, courtesy of the short sellers looking to get squeezed at $70k. New highs are incoming,” Munger predicted.

We likely start the week off with a bang, courtesy of the short sellers looking to get squeezed at $70k.

New highs are incoming. Tick tock! #bitcoin pic.twitter.com/OFiNmlmc9Y

— Bitcoin Munger (@bitcoinmunger) March 10, 2024

This was evidenced by the liquidation of approximately $23.5 million in short positions during Bitcoin’s ascent to $71,000, as per Coinglass data.

New money was entering the market over the weekend, and last week. Leading stablecoin Tether (USDT) was minted, as on-chain analysis firm Lookonchain reported: “The Tether Treasury minted 2 billion USDT again [yesterday]! And 5 billion USDT has been minted on Tron and Ethereum in just one week!” reported on-chain analysis firm Lookonchain.

One notable transaction involved a whale or institution receiving 261.6 million USDT from the Tether Treasury and depositing it into the Binance exchange, suggesting substantial preparatory activity for major trading operations.

After #TetherTreasury minted 2B $USDT, a whale/institution received 261.6M $USDT from #TetherTreasury and deposited it into #Binance.https://t.co/ohBcxqbrzThttps://t.co/Cxs2WfFPCn pic.twitter.com/fvL7Cz5Tvv

— Lookonchain (@lookonchain) March 11, 2024

The enthusiasm surrounding Bitcoin Exchange-Traded Funds (ETFs) in the United States has been extraordinary. “Bitcoin ETFs have attracted more than $7.5 billion in net new assets since launching in the US on January 11, making many of them among the most successful ETF launches of all time,” noted Matt Hougan, CIO of Bitwise, in a memo to investment professionals.

Hougan further detailed, “At Bitwise, we’ve engaged with registered investment advisors (RIAs), family offices, and venture capital funds among our current buyers. Looking forward, we’re in discussions with major wirehouses, institutional consultants, and large corporations, which represent trillions of dollars in assets.”

This insight underscores a growing confidence in Bitcoin ETFs as a mainstream investment option, with expectations of significant capital inflows from these entities starting in the second quarter of 2024, indicating a bullish outlook for Bitcoin’s future. He stated “Based on current trends, I’d suspect we’ll see our first significant flows from [major wirehouses, institutional consultants, and large corporations] in Q2 2024.”

At press time, BTC traded at $71,296.