Bitcoin prices have reached yet another record, flirting with the $69,000 price level as the digital currency benefits from numerous tailwinds.
Around 9:15 a.m. EST, the digital currency rose to $68,990.90, CoinDesk data shows.
Upon attaining this level, it had rallied close to 140% this year, additional CoinDesk figures reveal.
After coming close to $69,000, the cryptocurrency fell back, but only slightly, failing to drop below $68,000.
Following that very modest decrease, it recovered, trading closer to $68,600 at the time of this writing.
When explaining these most recent gains, market analysts cited several developments, which ranged from anticipation surrounding the upcoming Taproot upgrade to the latest inflation figures and how they might portend a greater interest in bitcoin.
“A range of factors continue to function as structural tailwinds for Bitcoin’s price,” said Kay Khemani, managing director at Spectre.ai.
“These include ongoing ETF approvals, that for now, are limited to just the U.S.; increased clarity on unified and coordinated regulatory reform, which could help govern digital assets, thereby weaving them into the existing financial fabric; and finally, Taproot upgrades that give Bitcoin functional utility within the developer community, all of which provide Bitcoin bears with cause for concern.”
Other analysts also spoke to the Taproot upgrade, with Armando Aguilar, vice president of Digital Assets Strategy for Fundstrat Global Advisors, describing it as bitcoin’s “biggest upgrade in four years.”
“Taproot will give greater transaction privacy as well as efficiency,” he stated.
“But the biggest upgrade will be that it will unlock the potential for smart contracts.”
“Investors have become bullish on the latest upgrade, pushing the digital asset to new ATH in addition to macroeconomic factors,” said Aguilar.
Marc Bernegger, a board member of Crypto Finance Group, also weighed in on this matter.
“The Taproot upgrade will have a substantial impact on the future growth and usage of Bitcoin and will increase the adoption rate dramatically,” he stated.
“This definitely also has an impact on the demand and price of Bitcoin.”
Petr Kozyakov, co-founder and CEO of the global payment network Mercuryo, also spoke to the upcoming upgrade, but emphasized the importance of a separate development.
“Bitcoin just surged to yet another All-Time High (ATH) just above $68,700 as the anticipation and build-up around Bitcoin’s Taproot upgrade, scheduled to take place in a few days, soars higher,” he stated.
“While the Taproot upgrade marks a major shift in how the Bitcoin network will operate, especially in terms of transaction fees and smart contracts integration, the main forceful driver of the current run is a whole different fundamental.”
He next spoke to U.S. inflation figures, which were released today and showed that the the Consumer Price Index for All Urban Consumers climbed 6.2% over the last year.
“The inflationary trend is obvious and is bound to continue on its upward surge,” said Kozyakov.
“Investors are exploring the options that cryptocurrencies, particularly Bitcoin, provide as a viable hedge against inflation,” he stated.
“The inflationary factor appeals more to a wider class of investors compared to the Taproot Upgrade and is billed to fuel a continuous rise in BTC at least until the end of this year.”
Bernegger also spoke to these latest figures.
“The publication of the massive US inflation rate today was an additional trigger for the price spike of Bitcoin,” he stated.
“More and more investors are worried about a permanent and high inflation cycle and are looking for ways to preserve their assets.”