By Nathalie Voit
Bitcoin and Ethereum hit new all-time highs on Nov. 9, surging past their previous records to reach $68,530.34 and $4,837.59, respectively.
The news comes amid an ongoing regulatory crackdown on DeFi, or decentralized finance, that has investors excited about the increasing acceptance of cryptocurrencies by the public and government officials writ large. The just-passed House infrastructure bill that includes a tax reporting provision for crypto could also have influenced the markets.
Regulators, increasingly hawkish about the crypto industry amid widespread reports of mass crypto-hacks and scams, have signaled their intention to introduce regulation to protect consumers. Last month, the first bitcoin ETF launched on the New York Stock Exchange, making crypto history and sending the currency’s price soaring to an all-time high. The trading price of crypto has now jumped again to a new record high of $68,530.34, up from its previous high of $66,974.77 on Oct. 20, according to CoinMarketCap.
While cryptocurrency prices are volatile, some view the recent legislation as a sign that the government is finally taking the digital token seriously. A controversial cryptocurrency tax reporting requirement that passed under the $1 trillion bipartisan House infrastructure bill sent shivers across the industry. Still, it could also signal widespread support and recognition for the industry in the long run, according to the Motley Fool.
Persistent demand could also stem from worries about inflation. The digital currency is widely perceived by investors as a hedge against inflation, making it the preferred currency of choice in times of traditional market uncertainty, much like gold. Recent comments by billionaire investor Paul Tudor Jones favoring crypto over gold have also fueled investor excitement.
“The inflation narrative still dominates the headlines and people are feeling the pinch globally,” Coinbase said in its weekly email on Nov. 5. “Whether it’s gas prices in the U.S., energy prices in Europe or food prices in Latin America, the headwinds of supply chain constraints and a shrinking labor force has investors looking for a store of value.”
According to CoinDesk, the crypto market added $1 trillion in value in October. The total market capitalization of cryptocurrencies is now past $3 trillion, Forbes reported.
Ether, which tends to follow the price of Bitcoin, has similarly surged following reports of a massive ‘Altair’ upgrade aimed at reducing the platform’s power consumption. The price of the digital token has risen 989% over the past year, reported Al Jazeera.
Experts think Bitcoin is now on its way to reaching $70,000, where it may face significant selling pressure.
In a note sent Nov. 8 to CNBC, executive director at crypto hedge fund ARK36 Mikkel Morch said a $70,000 price for bitcoin now “seems imminent.”
