Bitcoin prices soared beyond key levels on Tuesday, experiencing a nearly 10% jump to reach $56,256.9, marking its highest level in over two years. The surge was attributed to signs of sustained capital inflows into spot exchange-traded funds (ETFs) launched earlier in the year. The world’s largest cryptocurrency now sits less than $14,000 away from its all-time high reached during the late-2021 bull run.
Ethereum, the second-largest cryptocurrency, also saw gains, rising by 3.6% to $3,217.48, reaching its highest level since early 2022.
The positive momentum in Bitcoin and the broader crypto market was fueled by a report from digital asset manager Coinshares, revealing that crypto investment products recorded a fourth consecutive week of capital inflows. In the week ending February 23, digital asset investment products saw total inflows of $598 million, with Bitcoin ETFs accounting for a significant portion of these inflows.
Bitcoin products alone attracted $570 million in inflows, with BlackRock’s iShares Bitcoin Trust leading the way with $543.5 million. This offset notable outflows from Grayscale Bitcoin Trust (GBTC) as new entrants entered the Bitcoin ETF space.
Coinshares also highlighted an increase in short interest in Bitcoin following recent price surges. Despite this, Bitcoin has risen approximately 24% in 2024, building on its more than doubling in price throughout 2023.
Supporting Bitcoin’s rally was the announcement from MicroStrategy Incorporated, the largest corporate holder of Bitcoin, revealing a recent purchase of 3,000 tokens for about $155 million.
The impressive performance of Bitcoin in 2024 was largely driven by the U.S. approval of ETFs directly tracking the cryptocurrency’s price. While institutional capital has flowed into Bitcoin, retail trading volumes have remained relatively subdued, reflecting lingering skepticism in the crypto industry due to past scandals and bankruptcies.
Despite the crypto industry’s challenges, the rally in crypto prices spilled over into related stocks. Major U.S. exchange Coinbase Global Inc, miner Marathon Digital Holdings Inc, and MicroStrategy Incorporated all experienced surges ranging from 15% to 22% on Monday.