Earlier in the week, the price of Bitcoin reached an all-time high of $68,025 (€58,000). According to CoinMarketCap, the currency increased by over 3% in just 24 hours, beating its previous record price of $67,016.50 last month.
The price of the second-biggest digital coin, Ether by Ethereum, reached $4814.80 (€4,153) – this is more than a 1% from the previous day and is continuing to rise.
As cryptocurrencies become more accepted by investors it’s predicted that this trend will continue. Additionally, the number of companies now accepting crypto as a payment method is rising, which is likely to increase confidence further.
What’s behind the price increases?
Although it’s not completely clear why the prices are rising so quickly, experts believe that interest in cryptocurrencies like Bitcoin has been rising since the first exchange-traded fund (EFT) with prices linked to the New York Stock Exchange started trading last month.
Going forward, investors hope that this new, regulated financial product will allow more funds to enter the cryptocurrency market.
And, there are signs this could happen. Last week, the regulator in Australia approved EFTs in Bitcoin and Etherum. This has boosted confidence in the market, with JP Morgan now forecasting crypto to reach $146,000 ( €125,000) in the long term.
One reason for the surge in prices, especially Ethereum, is that there’s a new trend called “Defi”, or decentralized finance. This is blockchain-based finance, which doesn’t rely on the central financial intermediaries used by the banking industry, is used by Etheruem.
Another reason for the price hike is the use of NFTs (non-fungible tokens) for digital receipts on some items. The boom in the use of these tokens is a major contributor to price rises.
It’s predicted that, in the future, prices will rise further due to improvements in cryptocurrencies, such as the recent Ethereum upgrade called Altair, which aims to make the currency more eco-friendly, faster, and use less energy.