$Bitcoin (BTC.CC)$ has once again broken historical records, with its price soaring past $94,000, thanks to the introduction of ETF options which have sparked a bullish frenzy. This significant development occurred as Nasdaq began offering options for the iShares Bitcoin ETF, further fueling the enthusiasm in the cryptocurrency market. Since the start of 2024, Bitcoin, the cryptocurrency with the largest market capitalization, has seen its value double, now hovering above $90,000 and nearing its all-time high.
The launch of these ETF options on Tuesday not only marked a pivotal moment for Bitcoin but also played a crucial role in its dramatic price surge, breaking the previous record set on November 13. The availability of options is anticipated to bring about a broader ownership of Bitcoin ETFs, potentially reducing the cryptocurrency's volatility significantly. According to Galaxy Digital's research head, Thorne, who spoke in a media interview on Tuesday, the introduction of options is expected to help mitigate Bitcoin's volatility. He suggested that as volatility decreases, more investors could start viewing Bitcoin as a major asset class with fundamental utility, rather than merely a high-risk bet.
Thorne also highlighted that these options strategies would allow financial institutions such as hedge funds to better hedge against the volatility risks associated with Bitcoin, increasing liquidity for both Bitcoin and its associated ETFs. This could also alter retail trading patterns during bullish markets. As Bitcoin continues to align more closely with traditional financial assets, the cryptocurrency industry must consider how to maintain controlled development.
Despite these advancements, the inherent volatility of Bitcoin still attracts speculators who bet on its rapid price movements. The U.S. Securities and Exchange Commission (SEC)'s approval of Bitcoin ETFs in January of this year was a primary catalyst for the significant price increases seen in cryptocurrencies throughout the year. Following a successful 10-month collaboration between BlackRock Inc. and Nasdaq, and after clearing regulatory hurdles with the U.S. Commodity Futures Trading Commission (CFTC), options trading centered around BlackRock's iShares Bitcoin ETF was finally launched.
The total market capitalization of the global cryptocurrency market has now surpassed $3.2 trillion. Trump’s re-election, signaling a return to the White House after four years, has spurred cryptocurrency enthusiasts to bet on a new era of prosperity for this asset class under a government that promises a more friendly and relaxed regulatory environment. During his campaign, Trump embraced digital assets wholeheartedly, expressing ambitions to transform the U.S. into a "cryptocurrency capital" and a "Bitcoin superpower."
In light of the current market value of $3.2 trillion, the cryptocurrency market last week surpassed one of America’s top seven tech giants in valuation. In the global stock market ranking, it stands just behind behemoths like Nvidia and Apple, significantly leading other top global companies.
With Bitcoin's market capitalization currently around $1.8 trillion, it remains the largest cryptocurrency by far. Wall Street investment firm Ned Davis Research recently upgraded Bitcoin to a "buy-only" status, predicting that its price could soar above $120,000 by next spring. "Due to the optimistic sentiment regarding Trump’s victory, we believe there is almost no resistance to Bitcoin's price rise until his inauguration," stated the strategist team at Ned Davis Research.
Geoff Kendrick, global head of digital asset research at Standard Chartered, predicts that Bitcoin could reach $125,000 by the end of this year and $200,000 by the end of 2025. Jan Van Eck, CEO of leading asset management firm VanEck, estimates that Bitcoin's price could ultimately reach $300,000.
As cryptocurrency exchange-traded funds (ETFs), such as those on the U.S. stock market, continue to attract substantial investment, there's an indication that financial institutions on Wall Street are increasingly purchasing them. These institutions generally prefer not to hold cryptocurrencies directly due to their volatile nature, opting instead for ETFs that offer a more stable investment alternative.
