BITCOIN climbed for the fourth time in five days, with speculators targeting US$70,000 once again amid growing exuberance for digital assets.
“Momentum is strong and the path of less resistance, given all the macroeconomic backdrop, is to the upside,” said Jaime Baeza, managing partner at crypto hedge fund AnB Investments.
The largest cryptocurrency rose as much as 2.9 per cent to US$68,898, surpassing a level reached on Wednesday (Oct 16) that was also the highest since Jul 29. Bitcoin last traded at US$70,000 on Jun 12.
Investors have added more than US$1.8 billion so far this week to the dozen US exchange-traded funds (ETFs) that hold Bitcoin, according to data compiled by Bloomberg. The investment products were first approved in the US in January.
Bitcoin reached an all-time high of US$73,797 in March after surging for weeks amid optimism that demand for the ETFs would overwhelm the amount of tokens available for sale. The price subsequently retreated by more than 30 per cent by early August, before embarking on the current bull market run.
“Inflows on the ETFs have been incredibly strong this week. also between 68k to 71k, there’s a lot of options positioning there so there could be some short gamma,” said Shiliang Tang, president of principal trading firm Arbelos Markets.
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As investors rush to the options market, dealers providing such contracts either buy or sell en masse in a bid to neutralise their fast-moving exposures – a dynamic known as “gamma hedging”.
Adding to the optimism are rising expectations that the next US presidential administration will be more crypto-friendly whether Vice-President Kamala Harris or former President Donald Trump wins next month’s contest.
“The polls are still very, very close, so investors need to be careful over the coming weeks,” said Matt Maley, chief market strategist at Miller Tabak + Co.
Harris pledged earlier this week to support a regulatory framework for cryptocurrencies. The acknowledgement follows years of complaints from the crypto sector that US officials have chosen a path of regulation through enforcement rather than by providing clarity. Trump has been actively courting crypto-focused voters and has several ongoing crypto-related endeavours.
“Harris pledged to create a regulatory framework for cryptocurrencies, signalling a more favourable environment for digital assets, regardless of the election outcome,” Baeza said.
Meanwhile, Dogecoin continued to rally after long-time supporter Elon Musk alluded to the memecoin during a campaign appearance on Thursday for Trump in Pennsylvania. Dogecoin climbed 6.6 per cent on Friday, and is up around 25 per cent this week. BLOOMBERG
