Due in part to the admission made on Monday by software company MicroStrategy (MSTR.O), a cryptocurrency investor, that it had just spent $155 million on purchasing roughly 3,000 bitcoins, the price of bitcoin has increased by more than 10% in just two sessions.
The approval of bitcoin-owning exchange-traded funds (ETFs) in the US has also helped the original and largest cryptocurrency by market value. Conversely, on Monday, trading volumes in a number of the funds increased and companies connected to cryptocurrencies saw a rise.
At $57,232, bitcoin was up 4.7% at the last check, while ether hit a record high of $3,290, its best since April 2022.
“There’s only so much supply … but the demand unleashed by the U.S. spot ETFs seems to be relentless.”
Justin d’Anethan, head of partnerships in Asia at Keyrock
Right now, the April bitcoin halving event is a big incentive. By halving the reward for creating tokens, this method aims to slow down the release of bitcoin, the quantity of which is set at 21 million, 19 million of which have already been mined.
With its value up 32% so far in February, Bitcoin is on track to record its biggest one-month rise since January 2023, and momentum is growing outside of the investment community.
The social media site Reddit announced on February 22 that it had used a small amount of its excess cash reserves to purchase bitcoin, opens new tab, ether, and matic, the Polygon network’s native token, as payment for the sale of specific virtual goods. Reddit had filed to list its shares on the New York Stock Exchange on February 22.
This month, ether has increased even more quickly and is expected to gain 41%.
This most recent price increase has been aided by increased market players’ anticipation of potential regulatory approval of spot ether ETFs.
“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, It represents a further maturation of the cryptocurrency market and a recognition of ethereum’s role in the future of cryptocurrencies within the financial system.”
Nick Crawley, DailyFX Senior Strategist
Even still, industry insiders and regulatory experts anticipate that the U.S. Securities and Exchange Commission will proceed cautiously with the spot ether ETF registrations. They point out that the agency’s acceptance of the bitcoin ETFs does not necessarily mean that it would approve other cryptocurrency products in the future.
Tuesday saw a rise in cryptocurrency stocks as well. Shares of cryptocurrency exchange Coinbase (COIN.O) opened at 5.8%, while new tabs were opened by bitcoin miners Marathon Digital (MARA.O) and Riot Platforms (RIOT.O), which saw increases of 5.7% and 0.7%, respectively.
Grayscale Bitcoin Trust (GBTC.P), the largest bitcoin ETF, opened a new tab and saw a 4.4% increase last time.
