Bitcoin hit a two-year high on Tuesday on signs of large players buying the cryptocurrency, while smaller rival ether topped $3,200 for the first time since 2022.
Bitcoin has rallied more than 10% in two sessions, helped by a Monday disclosure from crypto investor and software firm MicroStrategy, opens new tab that it had recently purchased about 3,000 bitcoins for an outlay of $155 million.
The original and largest cryptocurrency by market value has also been buoyed recently by the approval of bitcoin-owning exchange-traded funds (ETFs) in the United States. On Monday, trading volumes in several of the funds spiked and crypto-linked firms rallied too, in contrast to nervous broader markets.
Bitcoin rose as far as $57,036 in the Asian morning its highest since late 2021. Ether rose as far as $3,275, its highest since April 2022.
“There’s only so much supply … but the demand unleashed by the U.S. spot ETFs seems to be relentless,” said Justin d’Anethan, head of partnerships in Asia at Keyrock, a digital asset market maker.
A major incentive right now is the bitcoin halving event in April. This process is designed to slow the release of bitcoin, whose supply is capped at 21 million – of which 19 million have already been mined – by cutting the reward for producing the tokens in half.
Bitcoin has gained 32% in value so far in February, heading for its largest one-month gain since January 2023, and momentum is building beyond the investment community.
Social media platform Reddit, which on Feb. 22 filed to list its shares on the New York Stock Exchange, said it had invested a small portion of its excess cash reserves in bitcoin, opens new tab, ether and matic, the native token of the Polygon network, as a form of payment for sales of certain virtual goods.
Ether , which was up 1.1% at two-year highs around $3,220, has risen at an even faster pace this month, heading for a 41% gain.
Anticipation is growing among market participants over the possible regulatory approval of spot ether ETFs, which has helped this latest rise in price.
“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,” DailyFX senior strategist Nick Crawley said in a note.
“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.”
