Crypto mania returns to the markets. Bitcoin is continuing its wild ride this morning, up a further 4% today at over $63,000. This takes bitcoin’s gains so far this year to 50% (and it’s still only February, just!). This puts bitcoin in sight of its all-time high of almost $69,000, set in November 2021, before it fell back during 2022. Bitcoin’s gains in recent weeks have been driven by the launch of new Bitcoin ETFs, approved by US regulators last month, which make it easier to trade bitcoin. There have been large client inflows into the ETFs launched by investment groups such as BlackRock and Fidelity. Those ETFs are buying up bitcoins – at a rate faster than they are being created, or that long-time holders are willing to sell. This is pushing up the price. Another factor is that a bitcoin halving event takes place in April. This will cut the reward for mining bitcoins, which is designed to slow the supply of new coins into the market. One bitcoin bull, MicroStrategy, has also added to the rally by revealing this week it has bought another 3,000 bitcoin. Fomo, or fear of missing out, is another factor driving bitcoin higher, says IpekOzkardeskaya, senior analyst at Swissquote. Ozkardeskaya explains: "From a fundamental perspective, the price surge makes sense. Supply is limited, demand is surging, holders aren’t willing to sell and the arrival of Bitcoin ETFs made the asset class more investable for big players... Bitcoin ETFs have amassed $6bn since their inception, and BlackRock’s ETF saw a whopping $520 million inflows in a single day." In other news, US regulators are reportedly probing artificial intelligence pioneer OpenAI, the organisation behind the ChatGPT chatbot, after its boardroom turmoil three months ago. The Wall Street Journal reports this morning that the Securities and Exchange Commission is “scrutinising internal communications” by OpenAI CEO Sam Altman as part of an investigation into whether the company’s investors were misled. Altman was dramatically dismissed by OpenAI’s board in November, and then sensationally rehired a week later after a staff revolt. News of the SEC’s move comes as Altman holds talks with investors to raise trillions of dollars to reshape the global semiconductor industry. Also coming up today Growth data from India, Canada and Switzerland offers more insight into how the world economy fared in the last quarter of last year. Global investors are also poised for the Federal Reserve’s favoured inflation measure to be released today. The US PCE index, which tracks changes in the prices of goods and services purchased by consumers in the US, is expected to have dipped. The agenda • 8am GMT: Switzerland’s Q4 2023 GDP report • 8.55am GMT: Germany’s unemployment report for February • 9.30am GMT: Bank of England data on mortgage approvals and consumer credit • Noon: India’s Q4 2023 GDP report • 1pm GMT: Germany’s inflation report for February • 1.30pm GMT: US weekly jobless report • 1.30pm GMT: US PCE measure of prices
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