Bitcoin fell from the all-time high it reached on Thursday after the launch of the first U.S. Bitcoin futures exchange-traded funds. Analysts questioned the impact on cryptocurrency investment flows.
After hitting a record $67,000.16 on Wednesday, the world’s most valuable cryptocurrency fell 4.35% to $63,122.78 at 2:10 p.m. Eastern.
Bitcoin’s price plunged to $8,200 just before 7:30 AM. However, this was only for Binance’s U.S.-based exchange. A spokesperson for Binance U.S. stated that the flashcrash was caused by a bug within an institutional trader’s algorithm.
The spokesperson stated that while we are still investigating the incident, they had received confirmation from the trader that they had fixed the bug and that the issue appeared to be resolved.
Six months after reaching $64,895 its previous peak, Bitcoin’s latest rally was fuelled by the ProShares Bitcoin Strategy eTF’s debut.
There are a dozen futures-based bitcoin ETFs that could be launched in the next few months. The Valkyrie Bitcoin Strategie ETF will start trading on Friday under ticker BTF. VanEck’s Bitcoin Strategy ETF is expected to trade next week under the ticker BTF.
The long-awaited launch bitcoin ETFs has been greeted with excitement by investors who believe that it will encourage more investment from institutional and retail investors.
Analysts at J.P. Morgan expressed doubts about the proShares ETF’s impact on bitcoin’s price, which trades under ticker BITO.
“Will the launch BITO itself bring in significantly more capital to bitcoin?” They wrote that they doubted it, given the many investment options available to bitcoin investors.
“The bulls see this ETF to be a new investment vehicle that will open up the possibility for new capital to enter the bitcoin markets. The new ETF is only an incremental addition to the already crowded market of bitcoin investment vehicles.
Some bitcoin players believe that inflation risks are driving the rally, and not new investment products.
Others predicted that bitcoin’s recent peak would lead to more gains in the coming year, but with headwinds.
Edward Moya, Oanda’s senior market analyst, said that while Bitcoin’s bullish momentum may last longer, the global energy crisis must not be ignored. Many governments are facing energy shortages and could be concerned about cryptocurrency energy consumption.
Bitcoin could continue to gain momentum if it continues to rise towards $75,000, but a push towards $100,000 is difficult until the global energy crisis is over, he stated.
Ether, the second-largest cryptocurrency in the world, rose 1.87%, to $4,090.30, close to its May record of $4,380.