Bitcoin reached a two-year high on February 27, driven by indications of significant institutional purchases of the cryptocurrency. The rally was fueled by an announcement from crypto investor and software firm MicroStrategy, revealing its recent acquisition of approximately 3,000 bitcoins for $155 million.
Over the course of two sessions, Bitcoin surged by more than 10 percent, with several factors contributing to its upward momentum.
- US Markets: Bitcoin, the largest cryptocurrency by market value, experienced a boost from the approval of bitcoin-owning exchange-traded funds (ETFs) in the United States. The announcement led to a surge in trading volumes in many funds and rallied crypto-linked firms, contrasting the nervousness in broader markets.
- Interest Rates: Investors are optimistic that the Federal Reserve may halt interest rate hikes and potentially lower rates. As a result, they are turning towards riskier assets like bitcoin and other cryptocurrencies such as ether and dogecoin.
- Spot Bitcoin ETFs: JPMorgan’s Nikolaos Panigirtzoglou highlighted three catalysts explaining the renewed interest in cryptocurrencies. These include the bitcoin halving, Ethereum’s upcoming tech upgrade, and the potential approval of spot ether ETFs.
Crypto-related equities also witnessed significant gains in US trading, with MicroStrategy and San Francisco-based crypto exchange company Coinbase both surging over 16 percent. They continued to gain momentum in aftermarket trading as well.
