Bitcoin Surges to Two-Year High as Large Players Enter Market, Ether Hits $3,200
Bitcoin, the world’s largest cryptocurrency, experienced a significant surge on Tuesday, reaching a two-year high and signaling its biggest two-day rally of the year. This surge was attributed to the entrance of large players into the market, as well as the rise of its smaller rival, ether, which surpassed $3,200 for the first time since 2022.
One of the key factors contributing to Bitcoin’s rally was the disclosure made by crypto investor and software firm MicroStrategy. The company revealed that it had recently purchased approximately 3,000 bitcoins for $155 million. This news instilled confidence in other investors and helped drive Bitcoin’s price up by more than 10% in just two sessions.
Furthermore, the approval of bitcoin-owning exchange-traded funds (ETFs) in the United States also played a significant role in boosting Bitcoin’s value. On Monday, trading volumes in several of these funds surged, and crypto-linked firms experienced a rally, contrasting with the nervousness observed in broader markets.
Bitcoin reached its highest level since late 2021, rising by as much as 4.3% to $57,036. At the time of reporting, it was trading at $56,636. Ether, on the other hand, saw a rise of up to 2.7% to $3,273, marking its highest value since April 2022.
Justin d’Anethan, head of partnerships in Asia at Keyrock, a digital asset market maker, commented on the current demand for Bitcoin, stating, “There’s only so much supply … but the demand unleashed by the U.S. spot ETFs seems to be relentless.”
Another factor driving the surge is the upcoming bitcoin halving event in April. This event aims to slow down the release of bitcoin by halving the reward for producing new tokens. With the supply of bitcoin capped at 21 million, of which 19 million have already been mined, the halving event creates a sense of scarcity and further increases demand.
Notably, the momentum behind Bitcoin’s rally extends beyond the investment community. Social media platform Reddit, which recently filed to list its shares on the New York Stock Exchange, revealed that it had invested a portion of its excess cash reserves in bitcoin, ether, and matic (the native token of the Polygon network) as a form of payment for certain virtual goods.
Ether has experienced an even faster rise in value this month, with a potential gain of 41%. Market participants are eagerly anticipating the regulatory approval of spot ether ETFs, which has contributed to the recent surge in price. This development signifies the growing maturity of the cryptocurrency market and recognizes ethereum’s role in the future of cryptocurrencies within the financial system, according to DailyFX senior strategist Nick Crawley.
The positive market sentiment surrounding cryptocurrencies has also impacted related companies. Shares of crypto exchange Coinbase rose by 5.2% in U.S. premarket trading, while bitcoin miners Marathon Digital and Riot Platforms saw increases of 8.3% and 4.5%, respectively. The largest bitcoin ETF, Grayscale Bitcoin Trust, also experienced a rise of 4.3%.
As Bitcoin continues to rally and reach new highs, it is clear that the entrance of large players into the market and the growing acceptance of cryptocurrencies by mainstream platforms are driving this surge. With the anticipation of further regulatory approvals and the upcoming bitcoin halving event, the future of cryptocurrencies appears promising, attracting both investors and traders alike.
Disclaimer: The information provided in this article is for informational purposes only and should not be considered financial or investment advice.
