Bitcoin rose to a record price of more than $69,000 Tuesday, months after federal regulators allowed the asset class to enter the mainstream via exchange-traded funds, or ETFs.
The recent spike in bitcoin came after the Securities and Exchange Commission in a 3-2 vote allowed 11 firms to start exchange-traded funds based on bitcoin. The approval of ETFs, which can be traded like stocks, represented a big step toward wider acceptance of bitcoin, though commission Chair Gary Gensler remained cautious in his announcement of the vote: “Bitcoin is primarily a speculative, volatile asset that’s also used for illicit activity including ransomware, money laundering, sanction evasion, and terrorist financing.”
The day after the SEC’s Jan. 10 announcement, the price of bitcoin had risen to $47,000 per coin, The Washington Post reported.
Still, the SEC ruling was a big step toward bitcoin — once seen as a speculative fad — becoming like any other asset class.
Even before the SEC ruling, bitcoin had been on the rise since summer. But like other crypto assets, bitcoin’s price had crashed in 2022, creating the “crypto winter” that left several companies in the industry reeling and set off a chain of events that included the successful criminal prosecutions of massive crypto figures: Sam Bankman-Fried, the founder of crypto exchange FTX, and his rival Changpeng Zhao of Binance.
Bitcoin wasn’t the only asset rising Tuesday. At the other end of the spectrum, gold — typically seen as a place to park money during uncertain economic times — jumped to a record $2,145.60 per ounce in the morning and was still trading at more than $2,140 in the afternoon. Gold last hit a record high Dec. 4 at $2,135.40 per ounce, according to Reuters.
Bitcoin and gold gained at certain points over the past as investors wondered whether the Federal Reserve would tame inflation, said Rich Rosenblum, co-founder of crypto market maker GSR. “What the market is telling us is that they are both important inflation hedges,” he said.
Geopolitical uncertainty and anxiety about the upcoming U.S. presidential election have also pushed investors to look for havens, Rosenblum said. Gold has been a longtime stalwart for cautious investors, and while bitcoin remains far from being seen in the same light, he said, the cryptocurrency has gained more mainstream acceptance now that ETFs are available.
Julian Mark and Aaron Gregg contributed to this report.
