The cryptocurrency market has surged to nearly $2 trillion, a level unseen in nearly two years, driven by the recent rally in Bitcoin fueled by ETFs. Bitcoin, comprising approximately 52% of the market, climbed as much as 5.1% to $57,443, marking its highest level since December 2021.
The overall value of the crypto market soared to around $2.7 trillion a month ago during peak token prices.
Bitcoin’s price has risen by 32% since the start of the year, extending its prolonged rally and igniting interest in smaller tokens like Ether and Dogecoin. The introduction of Bitcoin exchange-traded funds in the US in January saw a net influx of $6.1 billion, reflecting increasing demand beyond traditional digital-asset enthusiasts. Additionally, MicroStrategy announced the purchase of another 3,000 Bitcoin tokens, boosting its holdings to around $10 billion.
Despite expectations of tightening monetary policy, digital tokens are surging, with Bitcoin outperforming stocks and gold. The rise in US Treasury yields hasn’t dampened bullish momentum in the crypto market. Shares of crypto-related companies, including MicroStrategy and Coinbase Global Inc., saw significant gains.
The massive inflows into Bitcoin ETFs have led to concerns about a potential supply shortage as miners struggle to meet demand. With Bitcoin’s upcoming halving in April, reducing the block reward for miners, overall supply is expected to diminish further, intensifying the supply squeeze and driving prices higher. Despite the potential challenges, analysts remain optimistic about Bitcoin’s future, citing a strong fundamental backdrop and potential for further upside.
