Bitcoin hit a new all-time high on Wednesday at $67,000.
For now, as Bitcoin went up, altcoins are also enjoying an uptrend, with Ether nearly hitting a new ATH at $4,380 on Coinbase. As a result, the total cryptocurrency market cap went past $2.79 trillion.
But it is expected that altcoins will soon lose their momentum as money flows out of them to chase Bitcoin’s gains and end up taking it even higher.
Tesla CEO Elon Musk also joined in on the excitement tweeting about the price action. This week, Tesla posted its third-quarter financial results, reporting record revenue and profits.
The electric car maker also continues to hold on to its stake in Bitcoin, first disclosed in February that it had invested $1.5 billion only to sell 10% of it in April.
At the end of the quarter, the company’s “digital assets” totaled $1.26 billion, down from $1.31 billion in the previous quarter. $51 million was reported as a Bitcoin-related impairment.
— Elon Musk (@elonmusk) October 21, 2021
Interestingly, on Thursday, the price of Bitcoin crashed to $8,000 on Binance.US. According to trader Satsdart, a whale fat-fingered, selling a lot of Bitcoin on Binance.US spot. It “is never the fault of an exchange btw,” he added.
Given that the wick went down so low, some happy people out there had their bids opened at that level.
As for why one would sell at $8k, the seller “market sold, and that’s just how deep the book was.”
Binance US casually wicking down to $8200 pic.twitter.com/UykFPl5OAc
— satsdart 🔺 (@satsdart) October 21, 2021
Overall the market remains extremely euphoric, especially after the first Bitcoin ETF started trading in the US and off-the-charts demand seen by it. In a matter of two days, ProShares Bitcoin Strategy ETF (BITO) amassed more than $1 billion in assets, unlike gold ETF in 2004, which managed to do this in five days.
Thanks to this, the open interest on Bitcoin futures has reached $27.17 billion, just inches away from the mid-April high of $27.38 billion. On CME, OI has reached $5.75 bln, just second to Binance’s $5.90 bln, with FTX coming at third spot with $4.39 bln, according to Skew.
“BTC has been on a tear, yet leveraged funds on CME continue to short, as evidenced by their net open interest moving further and further negative. These are likely the funds carrying out the basis trade. They hold BTC spot and short futures,” noted Delphi Digital.
With this, the funding rate is also climbing up, the highest currently on Bybit at 0.1669%.
CME Ethereum OI hits $1 billion for the first time pic.twitter.com/HfpOrgwHzh
— unfolded. (@cryptounfolded) October 21, 2021
“We’re seeing a whole new class of investors move into crypto. We’re seeing institutional and professional investors move into the market, and that’s moving the prices higher,” said Bitwise CIO Matt Hougan.
While not a physically-backed Bitcoin ETF as desired by the crypto community, the price appreciation shows that the market is excited about what an ETF means for the crypto market long term, he added.
This has, of course, sent the price of Bitcoin to new highs already, but it also means that five digits, $100k, is not out of the picture either. Fundstrat Global Advisors’s Tom Lee has predicted $168,000 per Bitcoin.
“Right now, sentiment is really high in this industry,” Sadie Raney, co-founder at crypto robo-advisor Makara. “There’s a lot of momentum behind Bitcoin.”
All time high in October, delivered as promised.
See you at 6-figure bitcoin 😘 https://t.co/lVl9idrp3p
— cobie (@CryptoCobain) October 20, 2021
As for the regulatory threat hanging over the market, it is both risk and opportunity. While regulatory overreach could mean a setback for prices, progressive or fair regulation, which seems a likely pathway if a futures ETF is an indication “that will unlock a bull market,” said Hougan.
Because that would be the opportunity of unlocking the full potential of what crypto could be. And investors have started to bet that we’re going to be on the progressive side of that, he added.