Bitcoin Hits Two-Year High as Large Players Drive Cryptocurrency Surge

On Tuesday, Bitcoin hit a two-year high on signs of large players buying the Cryptocurrency, while smaller rival ether topped $3,200 for the first time since 2022.

Bitcoin’s Rally and MicroStrategy’s Purchase:

Bitcoin has rallied more than 10% in two sessions, helped by a Monday disclosure from crypto investor and software firm MicroStrategy that it had recently purchased about 3,000 bitcoins for an outlay of $155 million.

Impact of ETF Approval and Market Sentiment:

The original and biggest Cryptocurrency by market value has also been buoyed recently by the approval of bitcoin-owning exchange-traded funds (ETFs) in the United States. 

On Monday, trading volumes in several funds spiked, and crypto-linked firms rallied too, in contrast to nervous broader markets.

Bitcoin rose as far as $57,036 in the Asian morning, its highest since late 2021. Ether rose as far as $3,275, its highest since April 2022.

“There’s only so much supply … but the demand unleashed by the U.S. spot ETFs seems to be relentless,” said Justin d’Anethan, head of partnerships in Asia at Keyrock, a digital asset market maker.

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Bitcoin Halving Event and Market Momentum:

A major incentive right now is the Bitcoin halving event in April. This process is designed to slow the release of Bitcoin, whose supply is capped at 21 million – of which 19 million have already been mined – by cutting the reward for producing the tokens in half.

Bitcoin has gained 32% in value so far in February, heading for its largest one-month gain since January 2023, and momentum is building beyond the investment community.

Reddit’s Investment and Ether’s Rise:

Social media platform Reddit, which on Feb. 22 filed to list its shares on the New York Stock Exchange, said it had invested a small portion of its excess cash reserves in bitcoin, ether, and Matic, the native token of the Polygon network, as a form of payment for sales of certain virtual goods.

Ether, up 1.1% at two-year highs around $3,220, has risen even faster this month, heading for a 41% gain.

Anticipation of Regulatory Approvals and Market Maturation:

Anticipation is growing among market participants over the possible regulatory approval of spot ether ETFs, which has helped this latest rise in price.

“The prospect of a spot Ethereum ETF is a further development for traders and investors alike after the recent launch of a variety of bitcoin ETFs,” DailyFX senior strategist Nick Crawley said in a note.