Bitcoin rally shines spotlight on investor risks

A much-anticipated US approval of wider bitcoin trading has helped the world's biggest cryptocurrency reach 20-month heights, risking however pain for new investors unaccustomed to its volatility.

Bitcoin this week reached above $44,000 for the first time since April last year, yet still remains far from a record-peak of almost $69,000 in 2021.

The recent surge has been driven by speculation around the creation of a so-called exchange-traded fund for the asset, which would directly track the price of bitcoin.

Spot bitcoin ETF would allow more of the general public to invest in the cryptocurrency without having to directly buy it.

"The introduction of bitcoin ETFs has the potential to improve market accessibility for institutional and non-professional investors, by providing (them) with a regulated path," Jeff Billingham, director of strategic initiatives at crypto group Chainalysis told AFP.

New investors

While bitcoin and rival digital tokens are attracting new younger investors, the Pew Research Center in March reported that overall, only 17 percent of US adults had invested in or used cryptocurrency.

This was largely unchanged compared with the previous two years.

When looking at young adults, they appear to hold a greater interest in cryptocurrency compared with traditional investors, according to French data.

A total 54 percent of new retail investors in France own cryptocurrency compared with 25 percent of traditional ones, according to a study published last month by French financial watchdog AMF.

Simon Peters, market analyst for eToro, said that while he could not comment on rival platforms, his company has witnessed a recent "uplift in crypto activity".

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