'Bitcoin bubble': Prices fall from all-time highs

Bitcoin (BTC-USD) prices are falling from their Friday morning all-time highs, following a demonstration That spread throughout the cryptocurrency market. This increase in Bitcoin value was mainly driven by the long-awaited approval of spot Bitcoin exchange-traded funds (ETFs).

However, investors are expressing concern that the cryptocurrency's rise may indicate an unsustainable bubble, prompting them to reevaluate their positions.

Yahoo Finance Sean Smith and Bradley Smith break down the details.

For more expert insights and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's Note: This article was written by Angel Smith

Video transcript

SEAN SMITH: Let's take a look at cryptocurrencies, more specifically Bitcoin. You're seeing a small drop here today, around 6%. Now for the move lower that came after Bitcoin actually led the cryptocurrency rally here earlier in the week. We were talking about all-time highs, the fact that Bitcoin finally broke through that $72,000 level.

Brad, we're seeing a bit of a pullback. It's not necessarily a big surprise given the rise we've seen in the price of Bitcoin, not just over the last two weeks, but really what we've seen since the beginning of the year.

And that same type of debate that we are having in the stock markets is starting to infiltrate the cryptocurrency markets. We talk about a bubble, whether or not Bitcoin is in a bubble, if we are starting to see signs of a bubble given the fact that this bullish momentum has not slowed down much.

BRAD SMITH: Yes, JPMorgan's Nikolaos Panigirtzoglou, the managing director there, said that when adjusting for volatility, Bitcoin's allocation here in investor portfolios has already surpassed that of gold here, and that's noteworthy for the debate where We have, of course, been talking about digital gold versus physical gold for a long time, which, in itself, has justified a lot of conversations given some of the new highs we've seen gold move towards.

So one of the most important things for Bitcoin specifically is the upcoming events that could occur and the types of inflows that we're seeing on top of that and the inflows into investor portfolio allocation that we were talking about a moment ago. And one of the additional things that stood out was a net inflow of $9 billion into Bitcoin ETFs since its inception. So, we have the inflows into the ETFs at the same time, where there will be some of the holders who maybe can sell, and especially if they did it in maybe a decade or, you know. , even five years ago. They may be able to sell to some of the investment companies or some of the ETF providers or issuers at a much higher price if they can get that offer back into the market.

And then a broader question arises: what kind of event does the halving create? Does that mean an even greater rise in the price of Bitcoin? These are just some of the events.

And then in other parts of the global crypto market cap, it will be the Ethereum ETF or the Ether ETF and we will see what kind of fanfare adds to this fire as well.

SEAN SMITH: Yes, it certainly seems like there is more talk about an Ethereum ETF every day.

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