Bitcoin reaches all-time high after slump of more than two years - but expert advises potential investors to remain cautious
- Bitcoin hit a high of $69,200 in a rally spurred by the approval of BTC ETFs
- It comes ahead of a so-called halving in April - cutting supply of new coins in half
Bitcoin hit a record high on Tuesday, fueled by investors pouring money into newly-approved exchange-traded funds (ETFs) that track its value.
The flagship cryptocurrency was trading at $69,200, topping November 2021's all-time peak of $69,000.
The bull run comes after the US securities regulator approved 11 Bitcoin ETFs, which can be bought and sold like stocks.
Their availability on the market dramatically widened the opportunity for institutional and individual investors to get exposure to Bitcoin.
Last week, Bitcoin ETFs saw a net inflow of around $1.7 billion, meaning money going in has topped $7.4 billion since their introduction in January, according to Fineqia.
Bitcoin hit a high of $69,200, topping November 2021's all-time peak of $69,000
The price of both gold and Bitcoin have risen in recent months as speculation the Federal Reserve will cut interest rates soon mounts
'The flows are not drying up as investors feel more confident the higher the price appears to go,' said Markus Thielen, head of research at crypto analytics house 10x Research in Singapore.
Bitcoin has also gotten a boost from the prospect that the Federal Reserve will soon cut US interest rates.
That can have the effect of prompting investors to shift their capital into assets that are higher yielding or more volatile - like Bitcoin or gold.
Further fueling the prospects for Bitcoin is the upcoming halving. The process happens every four years and cuts the rate at which tokens can be mined in half.
Bitcoin is limited to a supply 21 million, of which 19 million have already been mined.
Some experts warn however that now may not be the right time to buy into Bitcoin and that those considering it should be cautious.
Latih Khalaf, head of investment analysis at AJ Bell, said investors should be cautious of Bitcoin
'The Bank of International Settlements estimates that around three quarters of Bitcoin buyers between 2015-2022 were likely to have lost money,' said Latih Khalaf, head of investment analysis at AJ Bell.
That is the case even though there was a significant rise in the price of the cryptocurrency over that timeframe.
Khalaf said those losses were incurred because investors 'got sucked in at precisely the wrong time,' like when Bitcoin made headlines.
He also noted that the cryptocurrency still faces significant regulatory hurdles, making its future uncertain.
'As ever, retail investors shouldn't bet their shirt unless they're willing to lose it,' he said.
