The price of bitcoin jumped to a new record on Friday, breaking through $70,000 for the first time ever.

The cryptocurrency was last higher by about 2% at $69,304.84, according to Coin Metrics. At one point, however, it rose as high as $70,170.00, topping its previous record set on Tuesday. It’s on pace to end the week higher by 10%.

The up move began around the time the U.S. stock market opened. With the introduction of spot bitcoin exchange-traded funds in the U.S., big crypto moves now tend to take place during traditional stock trading hours.

The early advance may have been driven in part by investors who were weighing the February jobs report, hopeful that a higher unemployment rate and cooler than initially reported employment growth in December and January will clear the way for the Federal Reserve to begin cutting interest rates later this year.

However, crypto trading has been especially volatile this week. After bitcoin reached a new record on Tuesday for the first time in more than two years, it quickly tumbled as much as 10%, pulling down other cryptocurrencies and crypto stocks along with it, then recovering much of those losses the next day. The bitcoin historical volatility index is at its highest level in almost a year, according to TradingView.

“Navigating old highs is notoriously tricky and the bitcoin dam doesn’t tend to burst at the first time of asking,” said Antoni Trenchev, co-founder of crypto exchange Nexo. “Tuesday’s sharp bitcoin sell-off was healthy, necessary and a prelude to further gains. Volatility defines bitcoin bull markets and 2024 will be littered with sudden and gut-wrenching 10%-20% plunges.”

The most famous crypto yielded almost 5,000% over the last decade.

London's property market has proved to be one of the best bets for investment over the past 10 years, with a yield of more than 44%, according to a new market analysis by British estate agency Foxtons.

The estate agent analysed the performance of the UK capital's residential property market against nine other popular investment options, including Bitcoin and the FTSE 100. It found that only two investment assets have delivered higher return on investment over the past decade.

 It is hard to beat the breathtaking 4,963% yield Bitcoin has seen in that 10-year period. The cryptocurrency had an average value of $840.3 in December 2013 which swelled to $42,544 in the period up to December 2023.

Meanwhile, gold - the safe haven investment - takes second place, with a 66.8% return on investment over the same period, priced around $1,223.9 back in 2013 and reaching $2,042 last December.

The price of silver has increased by a more moderate 22.9% while investing in the FSTE 100 index (tracking the stock price of the 100 biggest companies in the London Stock Exchange) would have seen an even smaller return of 15.7%.

The worst choice proved to be WTI Crude Oil (-26.3%), Brent Crude Oil (-30.2%) and natural gas (-41.5%).

"The investment landscape is constantly changing and, while some traditional vehicles have seen a sharp decline in value over the last decade, such as natural gas, other emerging markets such as cryptocurrency have experienced a boom period, albeit with a heightened degree of volatility," said Foxtons CEO Guy Gittins.

Is bricks and mortar in London overpriced?

The average value of a London home in December 2013 was £352,028 (€411,237). Today, the average price is £508,037 (€593,486) - an increase of more than £156,000 (€182,238), according to the research which looked at data from the Land Registry.

"The London market is undoubtedly the pinnacle when it comes to UK property investment and while the last year may have been a challenging one, the value of a London home has still climbed considerably over the last decade," said Gittins.

The UK estate agency expects the London property market to attract a high level of investment from investors as "it has now turned a corner in 2024".

Cryptocurrency investors spent much of 2023 waiting for good news.

Following the late 2022 collapse of FTX — at the time the world’s largest cryptocurrency exchange — popular digital currency bitcoin traded just north of $16,000 to start the year, a far cry from the more than $60,000 it traded for during 2021′s crypto boom.

Over the last few months, though, things began looking up. Crypto investors became more and more convinced that the SEC would approve a years-long effort from fund companies to bring a spot bitcoin exchange-traded fund to market, a move crypto boosters expected to stoke demand for the popular coin.

By the time news broke on Jan. 10 that 11 new bitcoin ETFs would begin trading, crypto investors were taking a victory lap, having bid the coin’s price up by 155% in calendar year 2023.

So, what now? Are we off to another crypto bull market, or have bitcoin enthusiasts gotten ahead of themselves?

“This is definitely an inflection point,” says Brian Vendig, president of MJP Wealth Advisors in Westport, Connecticut.

Here’s what he and other experts say to expect from here.

Expect more demand, and more new funds
The new wave of bitcoin ETFs makes it easier than ever for investors in more traditional assets, such as stocks and bonds, to dip their toes into crypto. Instead of having to open a separate account to buy crypto — often with high trading fees — investors in the ETFs can hold bitcoin right alongside their other investments in their brokerage accounts.

That’s just the beginning, says Matthew Sigel, head of digital assets research at VanEck, an investment firm that offers one of the 11 new funds.

“We think it was a huge step forward that will unlock significant demand, given the cost savings for the retail buyer and security available to institutional purchasers,” he says.

The new ETFs will soon allow advisors who deal with high net worth clients and big money institutions to start incorporating crypto into their portfolios, he adds.

“They don’t have the ability to put these bitcoin ETFs into client discretionary portfolios, yet,” Sigel says. “But we can observe several banks and brokers already preparing these models, which we expect to emerge later this year.”

Expect more new crypto ETFs, too — and in different flavors.

“It seems inevitable that we’ll have ETFs tied to ether, as a secondary cryptocurrency for people to invest in,” says Todd Rosenbluth, head of research at VettaFI. In the meantime, he says, “the door is now open for a range of ETFs that include bitcoin as well as other assets.”

Experts say these might be as simple as portfolios that combine bitcoin exposure with mainstream investments, such as those in the S&P 500. More complex so-called alternative strategies are likely to emerge as well, such as funds that use a bitcoin holding to hedge against the performance of other investments.

The outlook for crypto: ‘It’s all still speculation’
The rapid rise in bitcoin’s price of late would feel huge for a traditional asset, such as a stock or bond, but isn’t really anything to write home about in Cryptoland, says Stephane Ouellete, founder and CEO of FRNT Financial.

“You’ve seen some speculation come in on the announcement of bitcoin ETFs, but all the metrics we look at to gauge where we’re at in the market cycle tell us that we’re so far away from the FOMO market where everyone and their dog is talking about crypto,” he says.

Measures such as Google Trends searches for bitcoin and cryptocurrency, financing for crypto companies and investor trading volumes are all relatively muted, he says. In other words, if the crypto market is going to enter into another bull trading cycle, we’re in the very early days of it.

That doesn’t necessarily mean it’s time to pile in, though. Bitcoin experts aren’t buying because of an ETF rollout. Rather, they believe in bitcoin’s long-term potential as a store of value and as an alternative payment system in developing countries. They believe in a future where blockchain technology develops into a bigger part of the U.S. economic ecosystem.

That may never come to pass. And even if you believe in a long-term thesis, remember — cryptocurrencies don’t trade based on underlying fundamentals the way that stocks do. That means prices move purely based on investor activity.

“It’s all still speculation. That hasn’t changed,” says Vendig.

If you’re thinking about adding crypto to your portfolio, ask yourself what role it can play in getting you to your personal financial goals, he says.

“If an investor can answer that appropriately, then you can actually figure out the sizing you should have,” he says. “Do you want to dip your toe into this asset class? Or is that asset class not even rational for you as an investor?”

If you invest in crypto, Vendig recommends keeping things small. “I’d say 1% on the more conservative side, and no more than 5% of your total portfolio if you’re a growth-focused investor.”

US regulators have approved a new breed of financial product that will give people a way to invest in bitcoin through their brokerage for the first time, as if it were a regular stock.

A selection of financial institutions, including household names like BlackRock and Fidelity, have been given permission by the US Securities and Exchange Commission (SEC) to launch spot bitcoin exchange-traded funds (ETFs), whose value tracks the price of bitcoin. The approval comes after a peculiar incident on January 9, in which a hijacker used the agency's X account to announce the ETFs prematurely, leading to market chaos and forcing the SEC to publish a retraction.

The arrival of the spot bitcoin ETFs has been celebrated among investors as a source of new demand for the asset—now available in a more accessible format—that could push up the price. Yet a significant portion of the financial upside will be captured behind the scenes, not in the open market.

The ETF issuers will take a management fee, as a percentage of the sum people invest. One layer deeper, though, another subset of companies—intermediaries that provide the plumbing necessary for a spot bitcoin ETF to function—stand to earn big. These firms are responsible for storing bitcoin on behalf of the issuers, as appointed custodians, or creating new ETF shares and cashing in existing ones, in the case of authorized participants, or APs. The job of another set of third parties, market makers, is to help price ETFs accurately and ensure that trades run smoothly in the public market.

The pool of firms that perform these trading-related functions is limited, says James Seyffart, ETF research analyst at Bloomberg Intelligence, partly because of the amount of cash required to deal with large quantities of assets flowing in and out the door. With respect to custody, the Venn diagram of willing and qualified candidates is restricted further by the challenges of handling bitcoin, which sits on entirely different technical rails than regular shares. “It’s a whole different area,” says Seyffart.

As such, the spot bitcoin ETF issuers will share a small group of service providers, at least at launch. Between them, crypto exchanges Coinbase and Gemini will provide custody services for practically all the new ETFs. Only JPMorgan, Cantor Fitzgerald, Virtu Financial, and Jane Street, all multinational financial services firms, have signed on as APs to date.

The revenue won by these players will scale with the popularity of the ETFs; the more money invested and the more frenetic the trading activity, the more there is to be made below deck. The opportunity is “enormous,” claims Brett Tejpaul, head of institutional services at Coinbase, who predicts trillions of dollars will eventually flow into US spot bitcoin ETFs. It may be a “slow and building process,” but could represent a “giant expansion of the pie,” he says.

In the form of bitcoin futures ETFs, whose value is correlated with the price of the crypto token, US residents have had access to a loose proxy for bitcoin investment since 2021. But spot bitcoin ETFs are the closest thing to investing directly, without taking on the risk associated with storing crypto manually.

The SEC had for years been reluctant to approve spot bitcoin ETFs, over concerns that the volatility of prices and lack of regulated trading venues would put investors at risk. In August 2023, when a US judge ruled the agency had wrongfully denied an application by asset manager Grayscale to convert its bitcoin trust into a spot ETF, however, the SEC was forced to reconsider its position.

The SEC has now rubber-stamped all eleven pending applications for spot bitcoin ETFs, whose operators will now jostle, says Seoyoung Kim, professor of finance at Santa Clara University's Leavey School of Business, to attract the most investment. The “usual suspects,” she says, with the broadest reach and strongest reputation—the likes of BlackRock—are in prime position. Relationships with these companies could be highly valuable for the intermediaries.

The additional revenue stream could be particularly important for the US-based crypto firms tasked with storing bitcoin for the ETF issuers, who have found themselves in conflict with regulators over their consumer-facing services in the last year. In June, the SEC sued Coinbase, which it accused of operating an unregistered securities exchange in the US. In October, the New York attorney general charged Gemini with participating in a $1.1 billion fraud in relation to a service whereby customers earned interest on crypto deposits. Both companies have denied the charges and will fight them in court. An expansion of their respective custody businesses though could help to offset the prevailing uncertainty over the future of consumer crypto trading in the US, amid the regulatory crackdown.

It would even be possible, says Kim, for the crypto firms now acting only as custodians to move into other areas of the ETF plumbing—as APs, for instance. Coinbase does not rule out the possibility, says Greg Tusar, head of institutional product, but will lean into crypto-specific services. Gemini will evaluate the services it provides as spot bitcoin ETFs mature, according to chief strategy officer Marshall Beard.

As traditional financial institutions grow comfortable with bitcoin’s technical complexities, there is potential they might “cannibalize portions of the market,” including crypto custody, says Austin Reid, head of business at crypto prime brokerage FalconX. In the interim, there are “opportunities for growth,” he says, for companies ready with the necessary crypto expertise to serve ETF issuers.

That opportunity would be multiplied if the new spot bitcoin ETFs begin to spawn variants, says Tejpaul. The ETFs could act as a “giant building block,” he says, on top of which various derivative products could be built, expanding the revenue available for custodians and other intermediaries to grasp.

Beneath these projections, however, is the assumption the spot bitcoin ETFs will succeed. The issuers, says Seyffart, anticipate strong demand for their new ETFs, or else they wouldn’t have queued up to launch them. For the intermediaries, much depends on whether the thesis holds true in practice—whether the ETFs will unlock a wave of pent up demand for bitcoin as the issuers hope.

“This is just the first step,” says Reid. “Then it’s a question of how [the ETFs] scale.”