Bitcoin jumped to a record high on Tuesday, the latest surge in the roller-coaster journey of the world’s largest digital currency.
The price briefly crossed $69,000, surpassing its prior all-time high of $68,990.90 from Nov. 10, 2021, according to reporting from the Wall Street Journal, which cited data from the CoinDesk Bitcoin Price Index.
Bitcoin’s price has risen dramatically over the past year, a surge fueled by regulatory approval for exchange-traded funds in the digital currency.
For years, everyday investors who wanted to trade digital currencies generally had to go to crypto exchanges, a potential deal-breaker for people unfamiliar with bitcoin.
That changed in January when federal regulators voted that ordinary American investors can buy and sell spot bitcoin ETFs in the same way they trade stocks.
The move opened up bitcoin investing to a larger swath of the American public, including potential investors who never quite understood what bitcoin is or how it works, let alone how to buy and sell it. Trading began in earnest.
The vote, taken by the U.S. Securities and Exchange Commission, allowed the sale of exchange-traded funds, or ETFs, to the public.
SEC approves bitcoin ETFs, clearing way for public trading
ETFs, for the uninitiated, are an investment vehicle akin to a mutual fund. They are traded on exchanges and typically track a specific index or “basket” of stocks, bonds or commodities. They function like stocks, with prices that change throughout the trading day, whereas mutual funds trade once a day at a single price.
Anticipation for the SEC vote drove up the price of bitcoin, which is notoriously volatile. The currency had traded at $17,000 at the start of last year.
The new ETFs are listed on Nasdaq, the New York Stock Exchange and the Chicago Board Options Exchange, all highly regulated exchanges, according to Reuters.
Investing in a spot-bitcoin ETF allows investors to reap potential profits from bitcoin without the attendant risks of owning bitcoin directly, investment experts said.
Owning bitcoin directly means storing it in a digital “wallet.” Using the wallet means maintaining passkeys, encrypted strings of letters and numbers that enable crypto transfers, according to Investopedia. The wallets can be appealing targets for hackers, and the system lacks federal regulation.
The federal securities agency had rejected prior bids for publicly traded bitcoin ETFs, on fears that bitcoin is susceptible to manipulation and fraud. The industry has sought ETF trading for more than a decade.
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Bitcoin ETFs cleared for trading include Fidelity, BlackRock
The applications approved this year came from 11 issuers, including such big-name investment firms as BlackRock and Fidelity.
Two of five SEC commissioners voted against the decision. One of them, Democrat Caroline Crenshaw, called the vote “unsound and ahistorical” in a statement.
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Public trading of bitcoin funds marks “the beginning of a world where it can be part of every portfolio,” said Nathan McCauley, CEO and co-founder of the crypto platform Anchorage Digital, speaking to Investor’s Business Daily in January.
