Leading cryptocurrency Bitcoin has soared to a more than two-year high above $57,000 after enterprise software firm MicroStrategy Inc announced it had bought about 3,000 more of the tokens for $155 million. Another crypto Ether also crossed $3,200 for the first time in two years.
In the past two sessions, bitcoin has soared over 10 per cent following the disclosure by MicroStrategy.
Bitcoin was last 3.3 per cent higher at $56,338, after earlier jumping to $57,055 for the first time since December 2021.
In January, Bitcoin ETF, which tracks the price of bitcoin, was approved by the US Securities and Exchange Commission (SEC), in a game-changer move for the cryptocurrency industry that has been trying for more than a decade to launch such a product. The US SEC approved 11 spot bitcoin ETFs, including BlackRock’s iShares Bitcoin Trust, Grayscale Bitcoin Trust, and ARK 21Shares Bitcoin ETF, among others.
CoinSwitch Markets Desk in a statement said, “BTC showed the highest one-day gain since pre-ETF days and the rally continues today with an impressive double-digit gain. Bitcoin is now at a touching distance of Rs 50 lakh per coin with investors growing confidence in this rally; for the first time in 2 years. However, it is worthwhile to note that the journey from $57k to $69k (previous all-time high) might not be easy as BTC will face a lot of strong resistance points on the way, starting at $57.5k.”
It added that with Blackrock’s spot Bitcoin ETF trading volume hitting a record $1.3 billion, and halving coming in the next 50 days, analysts are predicting this is an unprecedented bullish factor causing this gain.
Another notable performer yesterday was the newest Ethereum-based memecoin to be listed on Binance, PEPE (+56.2%) that has reached its listing month’s high as well showing investors’ growing confidence in the crypto space.
Currently, bitcoins have no legal backing in India and investors have to pay a 30 per cent tax on the income earned by trading in them.
Parth Chaturvedi, investments lead at CoinSwitch Ventures, said, “The spot ETF approval was a ‘buy the rumor, buy the news’ event and is the primary reason for the current surge in BTC prices. The spot ETFs have brought in a wave of institutional capital into the asset class and we are seeing strong inflows daily. Blackrock’s IBIT did over $1 billion in trading volume yesterday putting it in the top 10 most traded ETFs in the US, and it has only been 2 months since launch.”
Blackrock now has over $7 billion in BTC holding and Fidelity has over $5 billion, which are phenomenal numbers for a newly launched ETF. Couple with this demand surge, is the upcoming supply shock, in terms of the BTC halving which is scheduled to happen in April 2024.
“With daily BTC generation set to fall from 900 to 450 and constant demand of over 3k BTC by the new ETFs, the imbalance will result in price appreciation. Crypto Spring has arrived early,” Chaturvedi said.
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