Bitcoin, the leading cryptocurrency, reached a record high, briefly touching US$69,210 (AU$106,400) before slipping 6% to US$63,087 (AU$96,980). Since January, Bitcoin has increased by 45% from US$42,600 (AU$65,400) largely due to institutional demand, bringing its market cap to US$1.2 trillion (AU$1.84 trillion). The previous peak of US$68,980 (AU$106,070) in November 2021 occurred at the height of the crypto and NFT bull run, but was followed by significant blows to the crypto market including Terra Luna’s crash and FTX’s collapse.
Bitcoin is also approaching its fourth Halving event that happens every four years, which cuts the rewards for Bitcoin miners in half. This is intended to limit the supply of new coins and is typically associated with bullish trends. After Bitcoin’s third Halving in May 2020, its price rose from US$8,500 to nearly US$9,700 in three days. However, a price correction may follow due to such a rapid increase in price.
Ethereum, the second largest cryptocurrency by market cap, has mirrored Bitcoin’s growth, rising 47% since the start of the year, from US$2,300 (AU$3,580) to US$3,400 (AU$5,220). This came ahead of the network’s Dencun upgrade, which aims to streamline transactions. Analysts are watching to see how this will affect major Layer 2 projects such as Arbitrum, Polygon and Optimism. However, Ethereum founder Vitalik Buterin has reportedly sold approximately US$100,000 (AU$154,000) in ETH, bringing speculation regarding its impact on Ethereum’s post-upgrade price. Despite the optimism in the crypto market, potential investors are advised to exercise caution and conduct due diligence before investing.
