On Wednesday morning, Bitcoin smashed through the $65,000 barrier, setting a new high.
At 9:43 a.m. Eastern time, the digital coin reached an all-time high. According to Coinbase data, it continued to rise and was trading north of $66,900 an hour later.
Bitcoin had previously set a high of just shy of $65,000 in April before plummeting over the summer and falling as low as $29,800 in July.
Bitcoin has made a significant comeback this fall, gaining a significant boost this week when federal regulators approved the first exchange-traded fund containing bitcoin futures to begin trading on Tuesday.
In the coming weeks, more bitcoin futures ETFs from asset managers like ARK Invest and VanEck are expected to begin trading.
Some cryptocurrency watchers believe that the inclusion of bitcoin futures in ETFs will propel the cryptocurrency even further forward.
“People want the convenience of owning bitcoin in their brokerage accounts, and there’s probably been a lot of capital sitting on the sidelines waiting for that product to exist and now it does,” said Garrick Hileman, research chief at blockchain.com.
Still, Hileman told The Washington Post that there could be some warning signs flashing. The current rally could implode, just as it did the last time the digital coin set an all-time high in April.
He warned that short-term speculators using leveraged borrowing have been driving much of crypto’s recent hot streak. Interest rates on crypto loans have doubled in the last week, indicating that speculation is rife.
“We saw those levels in the spring around bitcoin’s previous all-time high — and that proved unsustainable,” said Hileman, who’s also a fellow at the London School of Economics.
Despite its volatility, Hileman believes bitcoin is a good medium- to long-term investment as it gains traction among institutional investors.
“Right now things are rocketing up and crypto assets are very volatile and might reverse, but if you have a longer-term perspective and put in a modest sum you’re not going to wreck yourself,” he said. “Now is a perfect time to get in if you’re brand new to crypto assets.”
According to Coinbase data, bitcoin has increased by more than 62,000 percent since 2013.
Ethereum, the second most popular cryptocurrency after bitcoin, also saw a significant increase on Tuesday, breaking through the $4,000 barrier for the first time since May.
According to Hileman, the most accessible coins — bitcoin and ethereum — will outperform more obscure “altcoins” like dogecoin and litecoin in the short term due to increased interest in crypto from old-guard asset managers and investors.
Bitcoin has increased by 41.2 percent in the last month alone.
Bitcoin, according to David Sacco, a finance professor at the University of New Haven and a former UBS investment banker, will likely fall again in the near future. He cited the company’s tumultuous year as an example.