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Bitcoin Hits New Record Above $65,000 After Wall Street Foray

Channels Television  
Updated October 20, 2021
An electric banner for the newly listed ProShares Bitcoin Strategy ETF is displayed on the floor of the New York Stock Exchange (NYSE) on October 19, 2021 in New York City. SPENCER PLATT / GETTY IMAGES NORTH AMERICA / Getty Images via AFP

 

Bitcoin struck a record high Wednesday, a day after its foray onto Wall Street, as stocks largely held steady as investors tracked earnings and economic data.

The dollar was mixed against its main rivals, while oil prices retreated.

Bitcoin briefly soared to above $65,000, a day after a financial instrument dedicated to the unit made its debut on the New York Stock Exchange.

The Bitcoin Strategy ETF, a new exchange-traded fund linked to bitcoin futures rather than directly to the currency, rose nearly five percent in its first day of trading on Tuesday.

The fund should be a more accessible vehicle for mainstream investors, and could therefore boost trading in the cryptocurrency.

“There is a possibility that the impact of the ETF’s launch might already be priced in, and we could see some ‘buy-the-rumour, sell-the-fact’ type of reaction in the days ahead,” noted ThinkMarkets analyst Fawad Razaqzada.

Known for its volatility, bitcoin could also “easily break the record high, before potentially climbing towards $70,000… which is the next psychological hurdle”, he added.

Asian stock markets mostly closed higher Wednesday.

Hong Kong led the gains, jumping more than one percent, with market heavyweight Alibaba rallying following reports that founder Jack Ma was on a trip to Europe — fanning hopes that China’s long-running crackdown on the firm may have run its course.

European stocks were near the break even line in afternoon trading, with Paris up marginally, and London and Frankfurt dipping.

Wall Street’s main indices opened with modest gains.

Strong profit reports from big-name firms over the past week have reinforced optimism that the corporate sector is, for now, weathering a recent slowdown in economic growth, supply chain issues and surging inflation, providing a much-needed boost to worried traders.

“So far, a trend among consumer staple goods appears to be developing as a positive theme, which means these important goods are at least getting to market,” said market analyst JJ Kinahan at TD Ameritrade.

Johnson & Johnson, United Airlines and Netflix were the latest positives from the reporting season, adding to top Wall Street banks, including JPMorgan Chase, Bank of America and Morgan Stanley last week.

Inflation worries

Rising prices and the end of central bank largesse continued to cast a shadow however.

Concerns about surging inflation running out of control have forced several central banks to hike interest rates already — with others to soon follow — and the prospect of an end to the era of cheap cash has caused an 18-month equity rally to stutter.

British annual inflation cooled slightly in September, official data showed Wednesday, remaining close to a nine-year peak that still risks a UK interest rate rise next month.

Despite the headline figure easing, analysts still expect the Bank of England to next month raise its main interest rate from a record-low level of 0.1 percent.

While some countries have already started the tightening cycle, all eyes are on the Fed owing to its oversized role in the global economy.

Key figures around 1330 GMT

Bitcoin – UP 5.0 percent at $65,996 (1355 GMT)

London – FTSE 100: DOWN 0.2 percent at 7,205.28 points

Frankfurt – DAX: DOWN 0.2 percent at 15,492.91

Paris – CAC 40: UP less than 0.1 percent at 6,674.58

EURO STOXX 50: UP less than 0.1 percent at 4,168.74

New York – Dow: UP less than 0.1 percent at 35,482.79

Tokyo – Nikkei 225: UP 0.1 percent at 29,255.55 (close)

Hong Kong – Hang Seng Index: UP 1.4 percent at 26,136.02 (close)

Shanghai – Composite: DOWN 0.2 percent at 3,587.00 (close)

Dollar/yen: DOWN at 114.26 from 114.39 yen at 2040 GMT

Euro/dollar: UP at $1.1639 from $1.1636

Pound/dollar: DOWN at $1.3783 from $1.3793

Euro/pound: UP at 84.45 pence from 84.35 pence

Brent North Sea crude: DOWN 0.8 percent at $84.41 per barrel

West Texas Intermediate: DOWN 1.0 percent at $82.13 per barrel.