- Bitcoin jumped 7% to start the week, nearing its all-time high from November 2021 as demand from new ETFs drives price action.
- Meme coins like Dogecoin and Shiba Inu also surged, indicating a return of retail investors to the crypto market.
- While bitcoin may cool in the coming weeks, long-term investors remain confident it will hit a new all-time high due to tightening supply and increasing institutional demand.
Bitcoin jumped to start the week, edging even closer to its all-time high after the rally took a breather over the weekend. The flagship cryptocurrency was last higher by 7% at $67,386.97, according to Coin Metrics. Earlier, it rose to as much as $67,493.00, its highest level since November 2021. Ether advanced 2% to $3,550.86.
Both coins are coming off their best week in almost a year — bitcoin gained about 21% and ether 16% — but paused their run over the weekend as the market digested two days of steep outflows from the Grayscale Bitcoin Trust (GBTC) that were offset by inflows into other “newborn” bitcoin exchange-traded funds.
Demand from New ETFs Driving Price Action
“With the birth of these nine new ETFs the big moves now tend to take place during the normal trading week rather than the weekends,” said Antoni Trenchev, co-founder of crypto exchange Nexo.
“What we’re seeing today … might well be a rerun of early last week when Bitcoin surged $10,000 in the space of a couple of days,” he added. “We’re in that sort of environment when a day or two of sideways consolidation can precede explosive price action thanks to the voracious demand of these new spot ETFs.”
At $67,000, bitcoin sits about 3% off its November 2021 intraday record of $68,982.20.
Meme Coins Surge as Retail Investors Return
Bitcoin lifted other crypto tokens, especially meme coins. Dogecoin surged 17%, while Shiba Inu coin rocketed 53%. Analysts point to their performance as evidence that retail investors, who have been absent for much of the recent crypto rally, are starting to return to the crypto market. Last week, meme tokens’ weekly trade volume surged to their highest level since late 2021, according to crypto data provider Kaiko.
Some crypto equities rode the bitcoin wave, such as Coinbase and Microstrategy, which rose 7% and 20%, respectively. Miners sat out, however, giving back earlier gains as the short-term effect of the upcoming halving in April — when mining companies’ revenue will be slashed — weighs on investors. Riot Platforms, Iris Energy and CleanSpark each fell about 6%. Cipher Mining slid 4% and Marathon Digital dipped about 2%.
Short-Term Outlook Remains Bullish
Some analysts have suggested that while bitcoin could keep rising in the short term, it may cool in the next few weeks, as unrealized profit margins approach extreme levels. Bitcoin’s realized price is sitting at just about $42,700, according to CryptoQuant.
Nevertheless, long-term investors are confident that the combination of increasing demand for bitcoin through the new U.S. ETFs and a tighter supply expected after the April halving event will push the price of bitcoin to a new all-time high.
Tailwinds from Broader Markets
Crypto has also been getting a slight bid from the stock market, where the tech-heavy Nasdaq Composite reached an all-time high on Friday, becoming the last of the major stock indexes to hit a record close this year. David Duong, head of institutional research at Coinbase, said that although March could be a month of sideways grinding for bitcoin, the cryptocurrency is benefiting from an AI- and blockchain technology-driven productivity boom he expects is here to stay.
