Bitcoin Hovers Below All-Time High Amid Spot ETF Frenzy

Bitcoin pulled back after briefly climbing above its all-time high and is hovering at around $65,000.

BTC is trading at $64,400 early afternoon New York-time, a 3.6% decline in the last 24 hours, according to CoinGecko. The largest cryptocurrency soared to $68,912 earlier, climbing just above its November 2022 high of $68,640.

The milestone marks a gain of 156.5% for BTC in almost five months, with BTC rebounding from a low of $26,729 on Oct. 12, The sustained rally has largely been attributed to months of giddy speculation surrounding the then-pending applications for spot Bitcoin ETF, culminating in a frenzy of institutional activity surrounding after the funds debuted on Jan. 10.

Bitcoin’s capitalization is also at a record high of nearly $1.35 trillion, while the combined crypto market cap is $2.54 trillion — its highest level since November 2021 and 10% shy of its $2.8 trillion all-time high.

The move has driven nearly $416 million worth of digital asset liquidations over the past 24 hours including $250 million worth of shorts getting margin called, according to CoinGlass. BTC accounted for $132.5 million worth of liquidations.

Spot ETFs & Halving Propel BTC

The fourth quadrennial Bitcoin halving is also set to take place next month, with the event reducing the rate of new BTC issuance by 50% and placing bullish pressure on the supply and demand dynamic of the Bitcoin markets.

The halving will follow the spot Bitcoin ETFs driving deflationary pressure on Bitcoin, with the funds recently accumulating Bitcoin at a pace exceeding the current rate of new BTC issuance by as much as 1,000%.

The spot Bitcoin ETFs posted their second strongest daily volume on March 4, with $5.5B worth of shares traded, according to data from Bloomberg. BlackRock’s IBIT ETF hosted $2.4B worth of volume alone, with its assets under management climbing to $11B. The funds hosted a record high of $8B in volume on Feb. 28.

ETH and DeFi Soar

Ethereum's ETH, the second-largest crypto currency by market cap, has also been on a tear, rallying as high as 3,815 Tuesday. That's the highest since December 2021. ETH is 24% away from its record high of $4,815.

Decentralized finance (DeFi) continues to heat up, with Total Value Locked (TVL) in smart contracts crossing $100 billion for the first time since May 2022, while weekly decentralized exchange (DEX) volume jumped to $42 billion, the highest in 12 months.