Bitcoin soars to record high, crossing $63,000

Saleha Riaz
·4-min read
Bitcoin's (BTC-USD) price soared to yet another record, this time touching $62,818.62. Photo: Getty Images
Bitcoin's (BTC-USD) price soared to yet another record, this time touching $62,818.62. Photo: Getty Images

Bitcoin's (BTC-USD) price soared to yet another record, this time touching $63,152.812 (£45,988.19), a day before US cryptocurrency exchange platform Coinbase plans to float on the stock market.

Meanwhile ethereum (ETH-USD), the world's second biggest cryptocurrency, continued its multi-month rally to cross $2,200.

Bitcoin, which has been up and down over the last few weeks, crossed $63,000 on Tuesday and at the time of writing was almost 4% higher, at $62,974.113. Over the weekend, it had jumped to more than $61,000.

Watch: What is bitcoin?

"Bitcoin continues to trade near its all-time highs as Coinbase prepares itself for its US IPO listing, which is taking place tomorrow [Wednesday]," said Naeem Aslam, chief market analyst at AvaTrade.

Coinbase is on course to make history as the first major crypto company to go public, paving the way to legitimise an industry marred with distrust from regulators and traditional investors.

The company having an IPO "is one of the biggest news for Bitcoin as it sends a very clear signal that regulators aren't going to take that much of a tougher stance against the cryptocurrency," noted Aslam.

"Coinbase's IPO is likely to bring more money inflow for Bitcoin, and more importantly, it is also going to increase the odds of Bitcoin ETF finally getting the green light from US regulators as well," he added.

Bitcoin hit new highs on Tuesday morning. Chart: Yahoo Finance
Bitcoin hit new highs on Tuesday morning. Chart: Yahoo Finance

Coinbase is due to list on the Nasdaq (^IXIC) on Wednesday 14 April with a valuation that could run in excess of $90bn (£66bn). It is the largest cryptocurrency exchange in the United States and lists about 50 cryptocurrencies for trading. 

READ MORE: Cryptocurrency platform Coinbase gears up for historic listing

It revealed recently that active users on its platform had surged to 6.1 million from 2.8 million in the fourth quarter of last year, while verified users, those with Coinbase accounts, jumped to 43 million to 56 million.

"Demand is flooding the market from institutions just as large amounts of bitcoin and ethereum are increasingly being taken offline and holders are transferring them to their own wallets. There is only one outcome from that, and investors should expect higher highs and higher lows throughout the year," said Simon Peters, analyst at multi-asset investment platform eToro.

"In the short-term, we may soon see some profit-taking from some investors - a common theme that occurs when bitcoin or its peers hit record peaks - but the long-term trend remains solid, with demand for alternative investments continuing," he added.

In late February, Bitcoin saw a retreat to as low as $43,000 amid uncertainty in the traditional markets over stimulus expectations and their positive effects on US bond yields.

The market value of all bitcoin in circulation hit $1trn for the first time earlier this year, data website CoinMarketCap revealed. In December it also soared past Visa (V) to make it the world’s largest financial service.

The cryptocurrency has been fuelled over the last 12 months by acceptance from mainstream investors and companies, such as Tesla (TSLA) and Mastercard (MA).

Watch: What are the risks of investing in cryptocurrency?

Last week, Tomer Niv, head of business development for eToroX, said "critics have argued that cryptoassets, including bitcoin, will never become a truly mainstream asset until institutional investors provide them with their stamp of legitimacy."

In a report in January, eToro had set out four barriers that it believed were stopping institutional investors participating in cryptoassets: regulatory uncertainty, immature market infrastructure, ongoing reputational and security risks, and market capitalisation.

“With the market cap of cryptoassets having just passed the $2 trillion barrier, we believe one of those barriers has now fallen," said Niv.

“Far from being simply symbolic, passing the $2 trillion mark means that cryptoassets now have a combined market cap in excess of Microsoft’s and approaching that of Apple’s. Of course, there are still hurdles to clear before institutional investors participate in great numbers. But we believe it is now a matter of when, not if we will see this happen," he added.

Crypto-asset exchange has recently pointed out that diversification is a growing trend among its clients.

It said more than 40% of its users said they will diversify their digital assets beyond bitcoin.

Of this, one third of clients invest only in bitcoin, while 13.5% invest exclusively in ether. Another 10.3% shun major currencies and maintain only altcoins (alternatives to bitcoin).

Watch: Stocks or bitcoin? Buy both, says investor