How much the crypto’s value has risen as Bitcoin surges and what experts predict in the future
Ethereum is closing in on a record high, mirroring Bitcoin which hit an all-time high of almost $67,000 (£48,500) on Wednesday.
Bitcoin’s surge comes off the back of the first US Bitcoin futures-based exchange-traded fund (ETF) opening trading on Tuesday.
Other major coins like Ethereum and Solana have followed in its footsteps, with Ethereum now inches away from breaking its $4,177 (£3,023) record from May.
Some bulls are now predicting a huge spike which could take Bitcoin over $100,000 (£72,000).
Why is Ethereum’s price rising?
Ethereum’s price tends to be very closely linked to Bitcoin’s.
Most major cryptocurrencies tend to move relatively is unison, and as the largest, Bitcoin’s movements can dictate the market.
What is an ETF?
As Investopedia explains: “An exchange-traded fund (ETF) is a type of security that tracks an index, sector, commodity, or other asset, but which can be purchased or sold on a stock exchange the same way a regular stock can. An ETF can be structured to track anything from the price of an individual commodity to a large and diverse collection of securities.”
It allows people to invest in something without having to actually purchase it, much like buying shares in a company.
This means people can purchase a slice of a diversified portfolio, rather than a single asset.
ETFs are regulated and assets are traded on an exchange, making it easy to buy and sell.
Why is this so big for crypto?
The Bitcoin ETF comes from ProShares and launched on the New York Stock Exchange on Tuesday.
It essentially allows people to bet on the future of Bitcoin without having to actually purchase the cryptocurrency.
This opens up the market to far more, and potentially far larger investors, who may have been unwilling to purchase coins through crypto exchanges, which can sometimes be complicated and are seen as more risky. The ETF allows investors to make Bitcoin in a more traditional manner.
Matt Senter, chief technology officer for Bitcoin rewards app Lolli, told The Independent: “A Bitcoin ETF will provide even more exposure to Bitcoin for those who are perhaps wary of buying it directly from an exchange.
“By allowing individuals to invest in Bitcoin through ETFs that track its underlying value, investors can become familiar with Bitcoin while fielding aspects of the ownership experience that may be daunting to crypto novices, such as navigating exchanges, wallets and private keys.”
The move could open other coins like Ethereum up to ETFs in the future, but Bitcoin’s growth alone has been strong enough to move the rest of the market.
Cryptocurrency price prediction
Analysts at Fundstrat Global Advisors have predicted Bitcoin’s price could climb as high as $168,000 (£122,000) by the end of 2021.
However, cryptocurrencies are notoriously volatile, meaning its price could equally crash again. This is why they are such a risky investment.
Jon Cunliffe, the Bank of England’s deputy governor for financial stability, warned earlier this week that “a massive collapse in crypto-asset prices” is a “plausible scenario”.
Referring to Bitcoin, he added: “When something in the financial system is growing very fast, and growing in largely unregulated space, financial stability authorities have to sit up and take notice.
“Regulators internationally and in many jurisdictions have begun the work. It needs to be pursued as a matter of urgency.”
Despite the recent rise in prices it’s important to note the volatility of cryptocurrency, which has seen large rises and falls throughout its history.
People invest at their own risk and Bitcoin and other cryptocurrencies are not regulated by British financial authorities.
The Financial Conduct Authority (FCA) warned in January: “Investing in cryptoassets, or investments and lending linked to them, generally involves taking very high risks with investors’ money.
“If consumers invest in these types of product, they should be prepared to lose all their money.”
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown previously explained the risks to i.
She said: “On top of being extremely volatile, most cryptocurrencies are unregulated, which not only adds another layer of uncertainty but also means that investors have little or no protection against fraud.”