Bitcoin, the leading cryptocurrency by market capitalization, continued its surge in Asia trading on Tuesday, hitting a two-year peak of over $56,000.
This upward momentum uplifted the broader crypto market, buoyed by positive market developments and increased buying from crypto enthusiasts.
Within just two days, the price of bitcoin surged by more than 10%, as reported by CoinMarketCap.
This surge followed an announcement from MicroStrategy, a Virginia-based firm specializing in crypto investments and software, revealing its acquisition of approximately 3,000 bitcoins for $155 million on Monday.
MicroStrategy Leads Crypto Enthusiasm with $10.5 Billion Bitcoin Holding
MicroStrategy, currently the largest publicly traded holder of bitcoin, disclosed earlier this month that it possessed around 190,000 units of the cryptocurrency, valued at over $10.5 billion presently.
Greta Yuan, head of research at the digital asset platform VDX, noted that the market was buoyed by the enthusiasm of crypto enthusiasts such as MicroStrategy, alongside a surge in Bitcoin ETF inflows, reaching a new record.
The broader cryptocurrency market also enjoyed a lift from the recent rally, with Ethereum, the second-largest cryptocurrency by market cap, achieving a multi-month high above $3,200.
In the U.S. trading session,stocks related to crypto experienced significant gains. Both MicroStrategy and Coinbase, a San Francisco-based crypto exchange company, surged by over 16% on Monday, continuing their upward trajectory in aftermarket trading.
Over the past year, the stock prices of these two crypto-related firms have witnessed a remarkable growth of 200%.
In a recent interview with CNBC, Alesia Haas, Coinbase’s CFO, attributed the company’s robust financial results to the regulatory approval of spot bitcoin ETFs in the U.S. last month. This approval sparked renewed enthusiasm surrounding the cryptocurrency.
According to VDX’s Yuan, the notable surge in bitcoin’s price also reflects the bullish sentiment among investors, particularly in the U.S., ahead of an upcoming “bitcoin halving” scheduled for the second half of April.
Bitcoin Halving Sparks Investor Frenzy and Record Inflows into Bitcoin ETFs
Bitcoin halving events occur approximately every four years, resulting in a halving of the reward for bitcoin mining. This reduces the rate of new bitcoin creation and diminishes the supply of new tokens available.
“As the Bitcoin halving approaches, investors are scrambling to position themselves optimally for the event. The new record volume of inflows into Bitcoin ETFs further reinforces confidence among bullish investors,” Yuan remarked.
The strong performance of bitcoin coincides with the decline of the U.S. dollar in trading on Monday and Tuesday. Market participants are awaiting U.S. economic data this week, which could provide insights into when the Federal Reserve might commence interest rate cuts.
Historically, bitcoin prices and the U.S. dollar index have exhibited an inverse correlation.
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