Bitcoin surpasses US$55,000 mark fuelled by ETFs, MicroStrategy purchases

Bitcoin has once again crossed the US$55,000 mark, a feat not seen since late 2021, bolstered by exchange-traded funds’ investor demand and additional acquisitions by MicroStrategy Inc.

In Singapore today, the most significant digital asset witnessed a 1% surge, standing at US$55,112 following an over 5% rise in the US session. Bitcoin’s value has seen an impressive 30% increase since the beginning of the year, fuelling a sustained rally that has also sparked speculative interest in smaller tokens such as Ether and BNB, reported Bangkok Post.

Bitcoin ETFs that started trading in the United States on January 11 have attracted a net inflow of US$5.6 billion, indicating an expansion in demand for the token beyond the committed digital-asset aficionados. The impending reduction in the token’s supply growth, known as the halving, is further fuelling the positive sentiment.

MicroStrategy, a business software firm that incorporates Bitcoin purchases into its corporate strategy, announced on Monday that it has bought another 3,000 or so tokens this month. The firm’s Bitcoin holdings now stand at approximately US$10 billion, said Fairlead Strategies’ founder, Katie Stockton.

“We do not expect a major pullback from Bitcoin given its breakout and positive intermediate-term momentum.”

Presently, the combined value of digital assets is approximately US$2.2 trillion, as per CoinGecko. This is a stark contrast to the bear market’s low of about US$820 billion in 2022 when FTX and other crypto platforms faced a downturn, said Sean Farrell, Head of Digital-Asset Strategy at Fundstrat Global Advisors.

“Interestingly, digital tokens are experiencing a surge despite investors scaling back expectations for more relaxed monetary policy this year, as suggested by the rise in US Treasury yields. Bullish momentum in crypto is unfolding despite an uptick in rates.”

Bitcoin has outperformed conventional assets like stocks and gold this year. The ratio of the token’s price to the precious metal is at its highest level in over two years.

Crypto-related firms’ shares also experienced gains in the US yesterday, February 26. MicroStrategy saw a 16% rise, trading platform Coinbase Global Inc increased by 17%, and miner Marathon Digital Holdings Inc leapt by 22%.

This positive sentiment also influenced Asian stocks associated with digital assets, with Japan’s Monex Group and South Korea’s Woori Technology Investment Co experiencing advances on Tuesday.