Money & Banking

Bitcoin edges off all-time high

Reuters Hong Kong | Updated on October 21, 2021

But momentum for more gains this year seen intact

Bitcoin fell slightly in Asian hours on Thursday, a day after marking an all-time high on optimism around the launch of the first US bitcoin futures ETF.

The world’s largest cryptocurrency was last down 1.3 per cent at $65,184 after hitting a record $67,016 on Wednesday, but still above a previous peak of $64,895 seen in April.

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“We think its going to go higher and we can get to 80,000 or 90,000 by the end of this year easy, but that won’t be without volatility,” said Matt Dibb, COO of Singapore-based Stack Funds.

Risk of overextension

In the past few days, Dibb said, traders were starting to pay high rates to borrow to buy bitcoin futures, “and that’s a sign that we could be a bit overextended, and there could be a pullback to come.”

He added he anticipated traders would rotate out of bitcoin and into major ‘altcoins’ — other cryptocurrencies.

Ether, the world’s second largest cryptocurrency, rose 1 per cent to $4,203 and there were also sharper gains in smaller tokens.

Market players say the latest wave of buying has been supported by the launch of the first US bitcoin futures-based exchange traded fund (ETF) with investors betting this will open a path to greater investment from both retail and institutional investors.

Sharp inflows

Existing bitcoin exchange-traded funds and products have seen sharp inflows since September.

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Average weekly flows to bitcoin funds totalled $121.1 million in October, up from $31.2 million a month earlier, data from London-based CryptoCompare shows.

The three months prior to September had seen outflows following steep losses for bitcoin in May and June.

Published on October 21, 2021

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