Bitcoin just broke $71,000. Here’s what’s driving new records

Bitcoin surged past $71,000 on Monday morning, London time, breaking its own record for the fourth time in a week.

The new record comes as the cryptocurrency is starting to drive inflows into spot Bitcoin exchange-traded funds, according to an analyst — not the other way around.

Spot Bitcoin ETFs have been attributed as a key driver behind the digital asset’s recovery this year, but the head of research at crypto brokerage FalconX says that relationship is about to change.

“If until about one week ago spot ETF inflows were driving prices, I have the impression that more recently prices are, at least to some extent, starting to also drive inflows,” David Lawant posted on Thursday.

The market is now entering a phase where Lawant expects to see more reflexivity, he added.

Reflexivity refers to a feedback loop where market trends and the fundamentals influencing them can enhance each other.

In this case, it would translate to the Bitcoin price soaring, which would then drive inflows into spot Bitcoin ETFs, which would drive the price higher.

Bitcoin broke its November 2021 all-time high three times over the past week: on Tuesday, Friday, and over the weekend, breaking the $69,100, $69,200, and $70,000 barrier, respectively.

However, a more dramatic price hike may take a while, Lawant said.

“If the past cycle is any guide, we might hover around the current levels for a while before decisively breaking into a new inning of the bull market trend,” Lawant said. “All market signals so far indicate that the current bull market trend remains in place.”

On Tuesday, US Bitcoin ETFs trading in the spot market saw their largest daily net inflows since they began trading on January 11 at $648 million, according to Bitwise.

Sebastian Sinclair is a markets correspondent for DL News. Have a tip? Contact Seb at sebastian@dlnews.com.