Bitcoin (BTC) has achieved a significant milestone against the Canadian dollar, reaching an unprecedented high roughly seventeen months following criticisms from the country’s leadership branding digital currencies as “irresponsible” investments.
The cryptocurrency surged to over $91,500 CAD as markets opened on Monday, surpassing its previous record of $86,954 established on November 10, 2021. This remarkable ascent comes after a tumultuous period where BTC plummeted to $26,000 CAD, triggered by a series of corporate crypto failures, which served as fodder for its political opponents.
As of the time of writing, Bitcoin is trading around $91,600 CAD, having peaked at $93,400 CAD earlier on Tuesday, March 5, 2024.
In a departure from its typical 4-year cycle, Bitcoin’s recent price surge has outpaced expectations. Traditionally, new highs are not achieved until well after Bitcoin’s 4-year “halving” event, yet this time, the halving is still over a month away.
The introduction of Bitcoin spot ETFs in the United States has significantly contributed to the surge in demand, with an average daily net absorption of over $180 million since their launch on January 11. Reports indicate that the supply of Bitcoin on OTC desks, from which the ETFs procure coins, is rapidly diminishing.
While the Canadian government permits the use of cryptocurrency, its legal status differs from that of traditional tender. Consequently, while online and physical stores have the option to accept digital currencies, they are not recognized as legal tender for tax payments. The decision to accept Bitcoin as a form of payment varies among establishments, often correlating with the strength of their online presence.
It’s important to distinguish between the legality of cryptocurrency and its status as legal tender in Canada. The government only recognizes the Canadian dollar as the official currency, and legal tender is strictly defined as notes issued by the Canadian Bank and coins from the Royal Canadian Mint Act. This distinction underscores the unregulated and decentralized nature of cryptocurrencies, which lack oversight or support from central authorities or financial institutions in Canada.