Bitcoin surges above $71,000 amid heightened demand frenzy

Bitcoin hits record high: Bitcoin soared to a new all-time high on Monday, surpassing the $71,000 mark, as the relentless rally in the leading cryptocurrency continued unabated.

Britain's financial watchdog announced its approval for digital asset trading products, allowing recognised investment exchanges to launch crypto-backed exchange-traded notes, further bolstering the cryptocurrency market sentiment.

In European trading, Bitcoin surged by as much as 4.8 per cent to reach a record high of $71,677, marking a staggering 70 per cent increase in gains for the year thus far.

The influx of capital into new spot bitcoin exchange-traded funds, coupled with anticipations of a potential interest rate cut by the Federal Reserve, has fuelled Bitcoin's upward trajectory.

Despite a slight slowdown in capital inflows into the 10 largest US spot bitcoin exchange-traded funds, reaching a two-week low in the week to March 8, the total still amounted to nearly $2 billion, as per LSEG data.

DailyFX strategist Nick Cawley remarked, "Bitcoin has started the week with a surge, dragging the rest of the cryptocurrency space higher with it."

Moreover, the impending halving event in April, which tightens the supply of Bitcoin, has contributed to the bullish sentiment. The event occurs every four years, reducing the rate of new supply entering circulation and the reward for crypto miners, historically supporting the price.

Cawley also highlighted the news of the London Stock Exchange (LSE) planning to accept applications for bitcoin and ethereum ETNs in Q2, potentially fuelling today's upward momentum.

However, the UK regulator cautioned that these products would only be available for professional investors authorised to operate in financial markets, stressing potential risks associated with crypto exchange-traded notes (ETNs) for retail investors.

Nevertheless, demand for cryptocurrencies is burgeoning across the investment community. Asset managers now hold the largest bullish position in bitcoin futures on record, indicating growing institutional interest in the digital asset.

Ether, the second-largest cryptocurrency, also witnessed a 2.1 per cent rise to approach $4,000, nearing its highest level in two years. Speculation surrounding potential approval of spot ether ETFs in the United States has driven prices up by 75 per cent this year.

(With Reuters inputs)