Bitcoin continued its upward momentum, climbing for the fourth time in five days as speculators target $70,000 amid growing enthusiasm for the cryptocurrency.
The largest cryptocurrency rose 2.9% to $68,898, surpassing the level reached on Wednesday and the highest since July 29. Bitcoin last traded at $70,000 on June 12.
“Momentum is strong and the path of least resistance is to the upside given the macroeconomic backdrop,” commented Jaime Baeza, managing partner at crypto hedge fund AnB Investments.
Investors have poured more than $1.8 billion into U.S. ETFs holding bitcoin this week, according to Bloomberg data. The investment products were first approved in the U.S. in January, boosting market confidence. Bitcoin reached an all-time high of $73,797 in March, buoyed by optimism about demand for ETFs. However, the price fell more than 30% in early August before the current bull run began.
Shiliang Tang, president of leading trading firm Arbelos Markets, noted the strong ETF inflows this week. “There are a lot of options positions, between 68,000 and 71,000, so there could be some short gamma,” he said. As investors flock to the options market, dealers who provide those contracts engage in “gamma hedging,” buying or selling to neutralize their rapidly changing risk.
Optimism is also fueled by expectations that the next U.S. presidential administration will be more crypto-friendly, regardless of whether Vice President Kamala Harris or former President Donald Trump win next month. Harris has addressed long-standing complaints from the crypto industry about a lack of regulatory clarity by promising to create a regulatory framework for cryptocurrencies. Trump, meanwhile, has actively supported crypto-focused voters and has ongoing crypto-related projects.
Matt Maley, chief market strategist at Miller Tabak + Co., warned investors to be cautious because the polls are so close. “The polls are still very, very close, so investors need to be careful in the coming weeks,” he said.