Bitcoin Price Surge Raises Concerns About Crypto Asset Custody

e turning point for the crypto sector,” she adds.

Bitcoin investors are feeling optimistic as the cryptocurrency inches closer to the $100,000 milestone, reaching above $98,000 this week. Experts believe that the recent election of Donald Trump as the 47th president of the United States has brought more stability and reduced uncertainty in the market. Mireya Fernández from Bitpanda mentions that this will likely lead to more liberal and crypto-friendly regulations in the U.S., which is a positive step forward for the crypto sector.

Looking at market fundamentals, Manuel Villegas, a Digital Asset Analyst at Julius Baer, highlights that Bitcoin’s strong prices around $90,000 are supported by solid demand for spot products, derivatives positions, and corporate interest in adding Bitcoin to their treasury reserves. While there may be some volatility ahead, the current demand for Bitcoin looks stable, suggesting that this trend could continue.

One key concern for investors, especially institutional ones, is asset custody. A survey conducted by Nickel Digital Asset Management found that custody is a bigger issue for investors than price volatility. In fact, the lack of a central authority was identified as the second-largest barrier to investing in digital assets, followed by ESG issues and market manipulation risks. Recent market volatility has attracted some skeptics, with 19% of respondents seeing it as an opportunity for initial investments, and 76% somewhat agreeing.

New developments in the market, such as the approval of options on spot Bitcoin ETFs by the Commodity Futures Trading Commission on November 15, are giving investors more tools to hedge against risks or further speculate on Bitcoin’s price performance. This approval has been seen as a positive move that could lead to more trading activity and increased market participation from major traditional financial institutions like BlackRock and Fidelity.

Overall, the crypto market is experiencing a period of excitement and growth, with Bitcoin’s climb towards $100,000 seen as a significant turning point for the sector. With strong market fundamentals and new developments on the horizon, investors are keeping a close eye on the market for potential opportunities and risks.