Bitcoin surged to a two-year high on Tuesday, marking its most significant two-day rally of the year, as large investors showed increasing interest in the cryptocurrency. Meanwhile, its counterpart, ether, surpassed $3,200 for the first time since 2022.
The rally in Bitcoin, which has seen a more than 10% increase in just two sessions, was partially fueled by crypto investor MicroStrategy’s disclosure that it recently purchased about 3,000 bitcoins for $155 million. Additionally, the approval of bitcoin-owning exchange-traded funds (ETFs) in the United States has further boosted investor confidence. Trading volumes in these ETFs surged on Monday, leading to a rally in crypto-linked firms as well.
Bitcoin was last trading up 4.7% at $57,232, while ether reached as high as $3,290, its highest level since April 2022.
Justin d’Anethan, head of partnerships in Asia at Keyrock, noted, “There’s only so much supply … but the demand unleashed by the U.S. spot ETFs seems to be relentless.”
Another key factor driving interest in Bitcoin is the upcoming halving event in April, which is designed to slow the release of new bitcoins by cutting the reward for producing tokens in half. With only 21 million bitcoins set to ever be mined, and 19 million already in circulation, this event is seen as a significant incentive for investors.
Ether has also seen a rapid increase in value this month, with a 41% gain so far. Market participants are eagerly anticipating the possible regulatory approval of spot ether ETFs, which could further boost its price.
Despite the positive momentum, regulatory experts and industry sources caution that the U.S. Securities and Exchange Commission may proceed cautiously with spot ether ETFs, following its approval of bitcoin ETFs. However, the overall sentiment is positive, with the cryptocurrency market maturing and gaining recognition for its role in the future financial system.
Crypto stocks also benefited from the rally, with shares of Coinbase up 5.8%, and bitcoin miners Marathon Digital and Riot Platforms climbing 5.7% and 0.7%, respectively. The largest bitcoin ETF, Grayscale Bitcoin Trust, was last up 4.4%.
