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Bitcoin Hits New Record of $72,000

The most prominent cryptocurrency, Bitcoin, continued its upward trajectory and reached new all-time highs at the beginning of this week. The digital asset's price climbed by 3% to $72,022.16, as reported by Coin Metrics. Earlier during the trading session, Bitcoin had soared to an unprecedented level of $72,750.16.

In the previous week, Bitcoin experienced volatile trading conditions, setting new record highs for the first time since 2021. However, the weekend saw a more stable trading environment for the cryptocurrency. This recent surge in Bitcoin's value highlights the continued interest and adoption of digital currencies, despite their inherent volatility.

The influx of investments into U.S. spot bitcoin exchange-traded funds (ETFs) continues to be a driving force behind the cryptocurrency's price movements. Last week, crypto investment products witnessed record inflows totaling $2.7 billion, according to data from CoinShares. This substantial inflow has pushed the year-to-date total to $10.3 billion, just shy of the record $10.6 billion for the entire year of 2021.

Concurrently, the heightened leverage in the crypto market has led to the most significant price fluctuations in nearly a year. Funding rates, which indicate the cost of holding leveraged positions, have reached their highest levels since January 2021. Furthermore, the open interest in bitcoin futures contracts has hit all-time highs, reflecting the increasing speculative activity in the market.

Meanwhile, Ether, the second-largest cryptocurrency, surpassed the $4,000 mark for the first time since December 2021, partially buoyed by Bitcoin's strength. Ether's price climbed 3% to $4,034.00.

Investors are also looking ahead to the Ethereum network's next major technological upgrade, dubbed “Dencun,” scheduled for this week. Historically, the crypto asset has experienced rallies leading up to the day of the upgrade, followed by a sell-off as traders cash in on the event.

Citi analyst Alex Saunders noted in a report on Monday that the price action surrounding Dencun could be different this time, given the confluence of other significant crypto catalysts currently in play. These include the inflows into bitcoin ETFs, the upcoming Bitcoin halving event, and the potential approval by the Securities and Exchange Commission for trading spot ether ETFs in the U.S. in May.

The performance of companies tied to the price of Bitcoin was mixed on Monday. While the crypto exchange Coinbase gave back earlier gains and closed nearly flat as the broader tech rally cooled, Bitcoin proxy MicroStrategy rose 4% after the company purchased an additional 12,000 bitcoins for over $821 million in cash, according to a filing.

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