Further records fell again on Friday. Bitcoin rises above $70,000 for first time as “gold rush” sentiment continues At least for a short period of time, as Bitcoin quickly gave up its gains. It recently dropped to a daily low of $66,264. In the afternoon, the largest cryptocurrency by market value rose to a record high of $70,184 (€64,419) on trading platform Bitstamp.
Meanwhile, the yellow precious metal touched a record high for the fourth consecutive day. A troy ounce (about 31.1 grams) hit an all-time high of $2,185 on the London Stock Exchange, the highest ever. The previous day's high was broken by about $21. Only the 2000 euro mark was not broken.
Interest rate prospects encourage investors
“The prospect of falling capital market interest rates around the world clearly plays into the hands of non-interest-bearing investments like bitcoin,” analyst Timo Emden commented. “Interest Rate Cut Speculations Fueled by Latest US Jobs Report.” A US labor market report released on Friday came in below expectations and confirmed expectations of an interest rate cut – as in the European Union – in June. Emden said the current constellation shows that investors' risk appetite is still not satisfied.
Gold prices are also driven by speculation that key interest rates will be cut in the US and the Eurozone. If interest rates fall, the downside of an interest-free gold investment will fade into the background to some extent. Gold, considered a crisis currency, is in demand due to several geopolitical risks such as the wars in Ukraine and Gaza. A third factor speaking to the rise in gold prices is continued high demand from some major central banks, particularly China.
Over the past few months, Bitcoin has soared. Prices are up more than 60 percent since the start of the year. Over the course of a year, the gain has been well over 200 percent, meaning that Bitcoin has roughly tripled in value. The most important reason for the rally here is the possibility of investing in Bitcoin through exchange-traded funds (ETFs) in the US from January. Additionally, there is the upcoming halving of the reward for Bitcoin transactions and the associated slower Bitcoin growth. Another reason is that there is generally good sentiment in financial markets, which causes investors to turn to riskier assets.
