After keeping the whole crypto industry in suspense for the past week, Bitcoin reached a new all-time high overnight Asia time, jumping over 5% in under three hours to reach a record US$67,276, according to data from CoinGecko. This is the highest the world’s largest cryptocurrency has traded since its previous ATH of US$64,804 in April, just before the mid-year crash.

“Damn, it feels good,” Justin d’Anethan, head of exchange sales at EQONEX, told Forkast.News, echoing the feeling of many in the industry. “No surprise here. We’ve been talking and expecting new all-time highs for the past few days. If anything, the price action was playing games, maybe clearing the overhang of sellers before [the previous ATH] to better break through later.”

Reflecting on previous BTC highs, d’Anethan believes the best is yet to come. “I remain decidedly bullish. Basically, if you look at the way Bitcoin has performed or behaved after it breaks all-time highs, it typically goes a lot higher, real quick.”

Even the more cautiously optimistic industry watchers expect Bitcoin to continue to perform well. “The expectation is a consolidation,” Caroline Bowler, CEO of digital asset exchange BTC Markets, told Forkast.News. “What we see continuously with Bitcoin is that when the price recedes, it recedes to a new high in and of itself, it doesn’t tend to slip back. That process of accretion, that process of growth is something that we can predict to see, certainly over the next year and into the 18 months.”

The rest of the market received a shot in the arm alongside Bitcoin’s run, with number two cryptocurrency Ethereum jumping almost 10% in 24 hours today, breaching the US$4,000 mark for the first time since April. It sat roughly US$100 under its ATH of US$4,536 for most of the day and was trading at US$4,180 at press time, according to data from CoinGecko.

“The very interesting chatter that I hear in the industry is that the focus is indeed now transitioning or cycling towards Ethereum,” d’Anethan said. “The next bet is we will have an Ethereum exchange-traded fund, so you can see that sophisticated traders are already starting to transition to another asset, a new trade that might have more upside, more potential. And you can see that actually in the derivative space.” The Bitcoin price had been toying with a new level all week as the launch of two Bitcoin futures exchange-traded funds in the U.S. sent its price soaring over the weekend, jumping almost 10% on Saturday alone. A Bitcoin futures ETF tracks the price of futures contracts and trades on traditional stock markets, granting exposure to Bitcoin for market players who would be otherwise restricted from investing directly in the US$1.2 trillion asset class.

The first of these ETFs by investment firm ProShares began trading on the New York Stock Exchange on Tuesday, reaching nearly US$1 billion of trading volume by the end of the day. This made it only the second fund to achieve such significant trading volume within 24 hours, after BlackRock’s Carbon Transition Readiness sustainable ETF. The second ETF from Valkyrie, which will trade on the Nasdaq, is expected to go live by the end of the week.

While this would have been a big deal at any point in Bitcoin’s history, there have been significant global developments in the crypto industry since Bitcoin’s last ATH that might be giving the price movement even more steam.

“What’s been very relevant is the pivot away from China and to the U.S. in terms of the Bitcoin mining and becoming almost like the epicenter of all of Bitcoin in particular,” Bowler said. “That kind of pivot then means it gives some extra gravitas to the regulatory noise that comes out of that particular country.”

China’s crackdown at the tail end of the bull run this year sent markets tumbling, as the hashrate across the Bitcoin network was severely affected. But the recent blanket ban on crypto trading in the world’s most populous nation had less of an impact as mining was already consolidated elsewhere, and there remained enough traders globally as to not impact the price as much.

Other factors

On-chain data suggests this price action is to be expected, however. Current exchange reserve levels are even lower than they were during the height of the bull run in April, and have been since mid-September, sitting around the 2.3 million BTC mark according to data from Crypto Quant. As Bitcoin is a programmatically limited supply, this suggests investors are holding off for higher prices. Simultaneously, the supply ratio of stablecoins — the cryptocurrencies that serve as a vehicle for investment into crypto — has been steadily increasing since mid-July, also according to Crypto Quant.

“There’s not a lot of Bitcoins that are being sold by traders, and you’ve got a lot of stablecoins — a fresh capital ready to buy cryptocurrencies,” d’Anethan said. “So, you put a high buying power and a low supply and you get higher prices as a result. So, that’s another reason why fundamentally, from an on-chain data perspective, I’m very bullish.”

Amid high levels of government spending in the recovery from Covid-19 and the prospect of energy crises in Europe and China, concerns of inflation are not far from people’s minds at the moment. Under such circumstances, people tend to look to hedge against that inflation, and while in the past, that may have been gold, increasingly people are turning to Bitcoin.

“We’re seeing the specter of potential stagflation actually with low-interest rates, high inflation,” Jonathon Miller, Australian director managing director of digital asset exchange Kraken, told Forkast.News. “So that’s a macroeconomic narrative that plays into people’s considerations for hedging. And Bitcoin is a legitimate hedge … But not only is it a store of value, it’s a medium of exchange.”

Miller highlights the growing use cases for Bitcoin, even within the past few months; recently El Salvador became the first country in the world to adopt Bitcoin as a legal tender, and social media giant Twitter began embedding a feature to tip content creators — effectively turning the platform into a cross-border remittance system.

“That is the power of this technology. It doesn’t exist in the same three-dimensional world that we do. It’s not tied down to geography in the same way,” Miller said.

Despite this recent price tear, Bitcoin’s market dominance continues to fall, however. Miller attributes this to the growing number of use cases for altcoins as the past few months have seen real growth in a few key tokens, such as Polkadot and Solana. The latter had a meteoric rise following the launch of its successful non-fungible token (NFT) series “Degenerate Ape Academy,” rising over 370% in under a month in early September, jumping to sixth position on the list of coins by market cap. Though it has since retreated and was trading at US$181.88 at press time, according to data from CoinGecko.

“That is something that was lacking in the previous bull markets,” Miller said. “Bitcoin has driven speculative investment in alternative currencies. But this year, we’ve seen real-world adoption of these alternative platforms … It’s a really good thing that we’re seeing significant growth in the other blockchains because they do have so much potential.”