Bitcoin cools below $67,000, but stays in sight of record high

© Reuters. FILE PHOTO: Representations of cryptocurrency Bitcoin are seen in this illustration, August 10, 2022. REUTERS/Dado Ruvic/Illustration/File Photo

By Amanda Cooper and Ankur Banerjee

LONDON/SINGAPORE (Reuters) -Bitcoin was perched just below a two-year peak on Tuesday, having jumped to a high above $68,800 and nearing the all-time high as money keeps rushing into the world’s most traded cryptocurrency.

Bitcoin has gained 50% this year and most of the rise has come in the last few weeks when inflows into U.S.-listed bitcoin funds have surged.

On Tuesday, it was down 1.2% on the day at $66,709, having risen earlier by as much as 1.97%, trading just shy of November 2021’s all-time peak of $68,999.99.

“It’s crypto mania 4.0, and I think if we continue to see fairly low bond and rate volatility, it could keep going. There’s definitely something of an irrational behaviour creeping into the market,” said Kyle Rodda, senior markets analyst at Capital.com.

Spot bitcoin exchange-traded funds were approved in the United States earlier this year. Their launch opened the way for new large investors and has re-ignited enthusiasm and momentum reminiscent of the run-up to record levels in 2021.

Net flows into the 10 largest U.S. spot bitcoin funds reached $2.17 billion in the week to March 1, with more than half of that going into BlackRock (NYSE:BLK)’s iShares Bitcoin Trust, according to LSEG data.

“The appetite to gain exposure to Bitcoin is reaching insatiable levels,” said Tony Sycamore, a market analyst at IG.

“While bitcoin is overbought in the short term, the move is far from done, and dips will be well supported with a move towards $80,000 not out of the question.”

The rally has come in tandem with records tumbling on stock indexes from Japan’s Nikkei to the S&P 500 and tech-heavy Nasdaq and with volatility gauges in equities and foreign exchange turning lower.

“When we’re at these key psychological levels, these record highs, of course we’re going to see a slowdown of sorts. That is to be fully expected,” Kathleen Brooks, research director at trading platform XTB, said.

Smaller rival ether has hitched a ride on speculation that it too may soon have exchange-traded funds driving inflows and is up over 50% for the year. It was last up 4.4% on the day at $3,747.

A regulatory filing on Monday showed the U.S. Securities and Exchange Commission has further delayed its decision on an application by asset manager BlackRock for its spot ethereum exchange-traded fund.

Elsewhere, the number of dollar-pegged stablecoins issued by Tether has crossed $100 billion, the crypto company said on its website on Monday. Tether issues a stablecoin which is designed to maintain a constant value of $1.