How is this Bitcoin wave different from before?

Without individual investors, the current market is a game of "sharks" when the cash flow is largely dominated by Bitcoin ETFs.

After reaching a peak of more than 69,200 USD, Bitcoin is still around 65,000-67,000 USD, the highest level in the past 2 years. But according to the New York Times , there is a big difference between the current "wave" and the boom in 2021 when digital assets became a cultural phenomenon.

As cryptocurrencies boomed in 2021, the rise was driven by ordinary individual investors. They are trapped between four walls during the pandemic. Daily money-making activities are limited, many people turn to financial investment and online money channels, which do not require physical presence, both suitable for the context of social distancing and open to the public. them a new hobby.

Not only Bitcoin, investors are also "crazy" about meme coins - digital currencies inspired by online jokes. Many people store their digital savings in new cryptocurrency banks with sketchy business models. Non-fungible tokens, digital collectibles, known as NFTs, also increased in price. In short, at that time, almost the entire market increased in price, the "fever" spread everywhere.

While this time, Bitcoin became almost the only one with a chubby chin. Other tokens also increased in price, but did not reach their previous peak. Over the past few days, meme coins have been hot but did not stay hot for long, and quickly went downhill. On March 6 alone, popular digital currencies in this group such as Bonk and PEPE lost nearly 30% of their value in the past 24 hours, while Dogecoin and Shiba Inu lost more than 28%.

The most important difference is that this "wave" received support from large financial institutions . This group of "sharks" includes BlackRock and Fidelity - two of the world's largest asset managers. Both offer spot Bitcoin ETFs and currently hold over 196,000 units.

Michael Anderson - founder of cryptocurrency investment company Framework Ventures commented: "This time is definitely very different from 2021. Maybe this will be a cycle led by financial institutions."

The New York Times believes that Bitcoin ETFs are a major turning point for the digital currency industry, paving the way for financial companies to offer new investment products tied to Bitcoin prices without directly owning them.

In essence, an ETF is a basket of assets divided into "shares". Investors buy "stocks" instead of assets. The launch of a Bitcoin ETF means prudent investors can dip their toes into the cryptocurrency market without having to worry about setting up a wallet or entrusting their savings to a startup that sounds worth it. doubt.

The impact of the Bitcoin ETF is immediately visible. Since launching in January, more than $7.5 billion in investment capital has poured into them, pushing up Bitcoin prices.

CoinDesk quoted Seth Ginns - head of investment at a cryptocurrency investment company CoinFund, stating: "The all-time high price would still happen without ETFs, but it is possible to see these funds has accelerated the bullish cycle for Bitcoin."

Nate Geraci - president of financial consulting unit ETF Store, said that the convenience of ETF funds from large financial institutions has opened up a new and significant source of demand. Not only a game for individual investors, the market now also has the participation of advisors and institutional investors.

"Although there are many factors pushing Bitcoin prices, there is no doubt that ETFs are playing a major role," the expert said.

Cryptocurrency advocates believe Bitcoin's surge today is just the beginning. They believe the market price of this coin can reach 100,000 USD. Even then, it doesn't mean the entire industry will develop smoothly.

Regulators have more or less accepted the fact that people trade Bitcoin. But they remain generally hostile to other digital currencies and the platforms that offer them.

The US Securities Commission (SEC) has filed a lawsuit against Coinbase - the largest US exchange, along with a number of other large companies. The results of those lawsuits are considered the basis for determining whether cryptocurrencies can continue to develop in the United States. "The industry moves in cycles. I don't know if it will return to 'winter' like in 2021," said John Todaro, an analyst at Needham.