(Bloomberg) -- Bitcoin climbed for the fourth time in five days, with speculators targeting $70,000 once again amid growing exuberance for digital assets.
“Momentum is strong and the path of less resistance, given all the macroeconomic backdrop, is to the upside,” said Jaime Baeza, managing partner at crypto hedge fund AnB Investments.
The largest cryptocurrency rose as much as 2.9% to $68,898, surpassing a level reached Wednesday that was also the highest since July 29. Bitcoin last traded at $70,000 on June 12.
Investors have added more than $1.8 billion so far this week to the dozen US exchange-traded funds that hold Bitcoin, according to data compiled by Bloomberg. The investment products were first approved in the US in January.
Bitcoin reached an all-time high of $73,797 in March after surging for weeks amid optimism that demand for the ETFs would overwhelm the amount of tokens available for sale. The price subsequently retreated by more than 30% by early August, before embarking on the current bull market run.
“Inflows on the ETFs have been incredibly strong this week. also between 68k-71k, there’s a lot of options positioning there so could be some short gamma,” said Shiliang Tang, president of principal trading firm Arbelos Markets.
As investors rush to the options market, dealers providing such contracts either buy or sell en masse in a bid to neutralize their fast-moving exposures — a dynamic known as “gamma hedging.”
Adding to the optimism are rising expectations that the next US presidential administration will be more crypto friendly whether Vice President Kamala Harris or former President Donald Trump wins next month’s contest.
“The polls are still very, very close, so investors need to be careful over the coming weeks,” said Matt Maley, chief market strategist at Miller Tabak + Co.
Harris pledged earlier this week to support a regulatory framework for cryptocurrencies. The acknowledgment follows years of complaints from the crypto sector that US officials have chosen a path of regulation through enforcement rather than by providing clarity. Trump has been actively courting crypto-focused voters and has several ongoing crypto-related endeavors.
“Harris pledged to create a regulatory framework for cryptocurrencies, signaling a more favorable environment for digital assets, regardless of the election outcome” Baeza said.
Meanwhile, Dogecoin continued to rally after long-time supporter Elon Musk alluded to the memecoin during a campaign appearance on Thursday for Trump in Pennsylvania. Dogecoin climbed 6.6% on Friday, and is up around 25% this week.
--With assistance from Vildana Hajric and Muyao Shen.
©2024 Bloomberg L.P.