Bitcoin, the world’s largest cryptocurrency by market capitalization, continued its upward surge on Tuesday, hitting a two-year peak exceeding $57,000. This ascent buoyed the broader crypto market amidst favorable market developments and increased purchasing activity from crypto enthusiasts.
According to Coin Metrics, the price of bitcoin rose by 4% to reach $56,851.59, with a peak earlier in the day at $57,445.14, marking its highest level since December 2021.
The rally was fueled in part by MicroStrategy, a Virginia-based crypto investing and software firm, which revealed its acquisition of approximately 3,000 bitcoins for $155 million on Monday. MicroStrategy currently stands as the largest publicly traded holder of bitcoin, with a reported holding of around 190,000 cryptocurrency tokens earlier in the month, valued at over $10.5 billion today.
Greta Yuan, head of research at the digital asset platform VDX, noted that the market found encouragement from entities like MicroStrategy, alongside a surge in Bitcoin ETF inflows.
The broader cryptocurrency market experienced upliftment from the rally, with Ether, the second-largest cryptocurrency by market cap, reaching a multi-month high surpassing $3,200.
In the U.S. trading scene, crypto-related equities witnessed significant gains. MicroStrategy and Coinbase, a San Francisco-based crypto exchange, both surged over 16% on Monday and continued their ascent in aftermarket trading.
Over the past year, the stock prices of these two crypto-related companies have surged by 200%.
In a recent interview with CNBC, Alesia Haas, Coinbase’s CFO, credited the company’s robust financial results to the recent regulatory approval of spot bitcoin ETFs in the U.S., which sparked renewed enthusiasm for the cryptocurrency. According to Yuan from VDX, the escalating price of bitcoin reflects optimistic investor sentiment, particularly in the U.S., in anticipation of the upcoming “bitcoin halving” slated for the second half of April.
Scheduled every four years, a bitcoin halving event involves cutting the reward for bitcoin mining in half, thereby reducing the pace of new bitcoin token creation and diminishing the available new supply. “With the Bitcoin halving approaching, investors are swiftly positioning themselves for the event. The record-breaking inflow volume of Bitcoin ETFs further validates the confidence among bullish investors,” Yuan remarked.
The impressive performance of bitcoin coincides with a decline in the value of the dollar on Monday and Tuesday. Market participants await U.S. economic data this week, which could offer insights into when the Federal Reserve might commence interest rate reductions.
Read More: Investors are gearing up for Bitcoin’s quadrennial ‘halving,’ reigniting Bitcoin euphoria
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