Investors heavily sold bitcoin in trading early Friday morning after the cryptocurrency hit a record high of $1,206.02 in overnight trading.
The surge in the price of bitcoin has been attributed to growing confidence that at least one of the three proposed bitcoin-focused exchange-traded funds, including the long-attempted Winklevoss ETF, will gain approval from the Securities and Exchange Commission by a March 11 deadline despite the fact that some analysts believe that none of the funds will be approved.
Approval of one of the funds would provide easier access to bitcoin for traders and would improve liquidity in the market. Despite seeing rising prices, the market has been stunned this year following an investigation by Chinese authorities resulted in a temporary suspension of bitcoin withdrawals from the country’s three largest bitcoin exchanges.
Others cite different reasons for the price increase. One theory is that as bitcoin has become more mainstream, it now follows the price of the overall stock market. Stocks have been on the upswing since the election of President Donald Trump in November, resulting in all-time highs on various indices.
Bitcoin’s previous record high of $1,165 to the U.S. dollar was achieved in 2013 at the height of the first great bitcoin boom that was fueled in part by the now-disgraced former bitcoin exchange Mt. Gox. Since dropping below $200 in January 2015, the price of bitcoin has steadily grown, exceeding $1,000 for the first time in three years on Jan. 2. As of early Friday, bitcoin was trading at $1,162.15.