Bitcoin Surges Beyond $57,000, Bolstering Cryptocurrency Market in the Latest Rally

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Bitcoin Surges Beyond $57,000, Bolstering Cryptocurrency Market in the Latest Rally
Important Points
almost the course of two days, the price of bitcoin increased by almost 10%, and on Monday it crossed the $57,000 barrier for the first time since December 2021.

The profits followed MicroStrategy's announcement of a second sizable acquisition of roughly 3,000 bitcoins for $155 million.

Other optimistic aspects, according to analysts, are the rise in money flowing into bitcoin ETFs and the asset's impending "halving event."The largest cryptocurrency in the world by market capitalization, Bitcoin, continued its upward trend in Asian trade on Tuesday, hitting a two-year high of nearly $57,000 and boosting the whole cryptocurrency market amid encouraging market developments and purchases from bulls in the space.

As per Coin Metrics, the price of bitcoin experienced a 4% increase and is currently at $57,042.25. The action was taken following the announcement on Monday by software and cryptocurrency investment business MicroStrategy of a $155 million acquisition of roughly 3,000 bitcoins.

Currently holding the most bitcoin that is publicly traded is Virginia-based MicroStrategy. Earlier this month, the corporation disclosed that it held over 190,000 cryptocurrency tokens, which is now valued at over $10.5 billion.

Greta Yuan, head of research at digital asset platform VDX, said that a "new record of Bitcoin ETF inflows" and the presence of "crypto bulls such as MicroStrategy" had "encouraged" the market.

The recent surge helped the majority of the bitcoin market. The value of Ethereum, the second-largest cryptocurrency by market capitalization, surged beyond $3,200 for several months.

U.S. trading volume for equities linked to cryptocurrencies increased as well. On Monday, MicroStrategy and Coinbase, a San Francisco-based cryptocurrency exchange, both increased by more than 16%, and they kept rising in aftermarket trading.

Over the past year, the stock prices of the two companies associated to cryptocurrency have increased by 200%.

Coinbase CFO: The excitement surrounding bitcoin ETFs is driving up cryptocurrency prices "across the board."VIEW NOW VIDEO 03:44
Coinbase CFO: The excitement surrounding bitcoin ETFs is driving up cryptocurrency prices "across the board."
Alesia Haas, the CFO of Coinbase, told CNBC this week that the company's recent impressive financial performance were due to the regulatory approval of spot bitcoin ETFs in the U.S. last month, which sparked a renewed interest in cryptocurrencies.

The rising price of bitcoin, according to VDX's Yuan, also reflects the "bullish sentiment of investors, especially in the U.S.", in anticipation of the impending "bitcoin halving," which is scheduled for the second half of April.

Every four years, there is a bitcoin halving event. During this time, the incentive for mining bitcoins, which is how transactions are digitally confirmed on the blockchain, is halved. This lowers the rate at which new tokens are created and the total quantity of new supply that is available.

Investors are scrambling to secure the finest positions for the impending Bitcoin halving. Another check on investor confidence for optimistic sentiment is the newly recorded number of inflows into Bitcoin ETFs, Yuan continued.

The robust performance of bitcoin coincides with Tuesday and Monday's declines in the value of the dollar. This week's U.S. economic data is expected by markets to provide insight into the timing of potential interest rate reductions by the Federal Reserve.

There has historically been an inverse relationship between the price of bitcoin and the US dollar index.