Bitcoin touches an all-time high above $69,000 then falls 5%
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Bitcoin has reached a new all-time high for the first time in more than two years, as this year’s rally — fueled by excitement over bitcoin ETFs and the upcoming halving event — accelerated.
The price of the cryptocurrency topped $69,210 on Tuesday morning before retreating, according to Coin Metrics. It was last trading lower by 4.9% at $64,345.91. The flagship crypto notched it previous record of $68,982.20 on Nov. 10, 2021 — about a year before the catastrophic failure of FTX plagued the crypto industry in what some call crypto’s Lehman Brothers moment.
“Bitcoin reclaiming its all-time high yet again shows it is never going away,” said Alex Thorn, head of research at Galaxy Digital. “In its 15 years of existence, bitcoin has seen four 75% [plus] drawdowns, and each time it has come roaring back.”
Clara Medalie, research director at crypto data provider Kaiko, echoed that sentiment, saying a new record is “an important psychological milestone” and “demonstrates crypto’s remarkable ability to bounce back and continue to persevere despite big headwinds.”
“Bitcoin becomes more useful as it grows more valuable,” Thorn added. “At higher market caps and daily float, it can support larger allocations. Bitcoin’s volatility has consistently decreased over time, allowing allocations to take larger position sizes.”
Bitcoin rockets to a new all-time high
Since the beginning of February, investors have been watching key themes in the bitcoin narrative push its price higher.
Catalysts driving the surge in the cryptocurrency include the U.S. spot bitcoin ETFs that started trading earlier this year, along with the tightening bitcoin supply ahead of the late April “halving.” This event is designed to create a scarcity event around the asset. The flagship crypto’s upward trend accelerated this week.
The new record is a triumph for an industry that has long suffered from reputational and regulatory risk that seemed to be at its worst just two years ago, when bankrupt crypto lenders dragged down crypto investors and crypto exchange FTX collapsed. At the end of 2022, as traders were trying to gauge the potential extent of the FTX contagion, bitcoin fell to a two-year low. The cryptocurrency fell 64% that year and has been fighting to prove its legitimacy since.
“The odds have always been against bitcoin,” Thorn said, citing naysayers who have referred to it as “a bubble” and compared it to the “tulip mania” in Holland during the 1600s. “The people show time and time again that they want a decentralized, programmatic, scarce digital currency.”
It also could signal the start of a new wave of retail investors re-engaging with the crypto market, said Needham analyst John Todaro.
“Retail interest is oftentimes momentum driven, and all-time high levels are a pivotal momentum driver for even more investment,” he told CNBC. Additionally, “this could lead to more capital flows, ironically, into altcoins that comparatively start to look cheaper,” he said.
Crypto, led by bitcoin, made a strong recovery in 2023, advancing 157%. The digital asset initially received a boost from the regional banking crisis in the U.S., and it caught a tailwind from speculation at the time that ETFs tracking bitcoin prices would receive approval from the Securities and Exchange Commission.
Some investors remain skeptical about the young crypto asset class, how to value it or whether it has any intrinsic value. Nevertheless, U.S. spot bitcoin ETFs have brought legitimacy to it and been hugely popular, with BlackRock’s iShares Bitcoin Trust (IBIT) passing $10 billion in assets under management last week.
However, with bitcoin on a hot streak, investors entering the market here should tread carefully as unrealized profit margins approach extreme levels.
“The market is positioned for a steep correction, possibly between 10% and 20%,” said Ed Tolson, CEO and founder of the crypto hedge fund Kbit. “Any material move down will result in cascading liquidations on the crypto perpetual swap markets, where retail has piled into levered long positions. This will drive funding rates very high. Over the next few quarters, we expect bitcoin to perform well, but with sharp corrections along the way.”
Oppenheimer’s Owen Lau agreed.
“The rise is so much so fast that we are cautious about a correction,” he said. “But longer term, there are still catalysts supporting the positive price action.”
Technology
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Chinese bargain retailer Temu changed its business model in the U.S. as the Trump administration’s new rules on low-value shipments took effect Friday.
In recent days, Temu has abruptly shifted its website and app to only display listings for products shipped from U.S.-based warehouses. Items shipped directly from China, which previously blanketed the site, are now labeled as out of stock.
Temu made a name for itself in the U.S. as a destination for ultra-discounted items shipped direct from China, such as $5 sneakers and $1.50 garlic presses. It’s been able to keep prices low because of the so-called de minimis rule, which has allowed items worth $800 or less to enter the country duty-free since 2016.
The loophole expired Friday at 12:01 a.m. EDT as a result of an executive order signed by President Donald Trump in April. Trump briefly suspended the de minimis rule in February before reinstating the provision days later as customs officials struggled to process and collect tariffs on a mountain of low-value packages.
The end of de minimis, as well as Trump’s new 145% tariffs on China, has forced Temu to raise prices, suspend its aggressive online advertising push and now alter the selection of goods available to American shoppers to circumvent higher levies.
A Temu spokesperson confirmed to CNBC that all sales in the U.S. are now handled by local sellers and said they are fulfilled “from within the country.” Temu said pricing for U.S. shoppers “remains unchanged.”
“Temu has been actively recruiting U.S. sellers to join the platform,” the spokesperson said. “The move is designed to help local merchants reach more customers and grow their businesses.”
Before the change, shoppers who attempted to purchase Temu products shipped from China were confronted with “import charges” of between 130% and 150%. The fees often cost more than the individual item and more than doubled the price of many orders.
Temu advertises that local products have “no import charges” and “no extra charges upon delivery.”
The company, which is owned by Chinese e-commerce giant PDD Holdings, has gradually built up its inventory in the U.S. over the past year in anticipation of escalating trade tensions and the removal of de minimis.
Shein, which has also benefited from the loophole, moved to raise prices last week. The fast-fashion retailer added a banner at checkout that says, “Tariffs are included in the price you pay. You’ll never have to pay extra at delivery.”
Many third-party sellers on Amazon rely on Chinese manufacturers to source or assemble their products. The company’s Temu competitor, called Amazon Haul, has relied on de minimis to ship products priced at $20 or less directly from China to the U.S.
Amazon said Tuesday following a dustup with the White House that had it considered showing tariff-related costs on Haul products ahead of the de minimis cutoff but that it has since scrapped those plans.
Prior to Trump’s second term in office, the Biden administration had also looked to curtail the provision. Critics of the de minimis provision argue that it harms American businesses and that it facilitates shipments of fentanyl and other illicit substances because, they say, the packages are less likely to be inspected by customs agents.
— CNBC’s Gabrielle Fonrouge contributed to this report.
WATCH: Trump tariffs mean higher prices, big losses for Amazon sellers
Jeff Bezos, founder and executive chairman of Amazon and owner of The Washington Post, takes the stage during The New York Times’ annual DealBook Summit, at Jazz at Lincoln Center in New York City, Dec. 4, 2024.
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Amazon founder Jeff Bezos plans to sell up to 25 million shares in the company over the next year, according to a financial filing on Friday.
Bezos, who stepped down as CEO in 2021 but remains Amazon’s top shareholder, is selling the shares as part of a trading plan adopted on March 4, the filing states. The stake would be worth about $4.8 billion at the current price.
The disclosure follows Amazon’s first-quarter earnings report late Thursday. While profit and revenue topped estimates, the company’s forecast for operating income in the current quarter came in below Wall Street’s expectations.
The results show that Amazon is bracing for uncertainty related to President Donald Trump’s sweeping new tariffs. The company landed in the crosshairs of the White House this week over a report that Amazon planned to show shoppers the cost of the tariffs. Trump personally called Bezos to complain, and Amazon clarified that no such change was coming.
Bezos previously offloaded about $13.5 billion worth of Amazon shares last year, marking his first sale of company stock since 2021.
Since handing over the Amazon CEO role to Andy Jassy, Bezos has spent more of his time on his space exploration company, Blue Origin, and his $10 billion climate and biodiversity fund. He’s used Amazon share sales to help fund Blue Origin, as well as the Day One Fund, which he launched in September 2018 to provide education in low-income communities and combat homelessness.
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