Bitcoin hovered around US$52 000 (R1-million) after a broad cryptocurrency rally that saw ether, the second biggest token, advance back to where it was before the terraUSD stablecoin collapsed almost two years ago.
Bitcoin’s 22% year-to-date gain has helped to lift the market capitalisation of digital assets above $2-trillion for the first time since April 2022, data from CoinGecko shows. Bitcoin and ether were up more than 1% at one point on Thursday in Singapore, with the latter changing hands at $2 785 as of 9.37am local time.
Sector-specific factors have been supporting bitcoin, including the debut of US exchange-traded funds dedicated to the token. The batch of products from the likes of BlackRock and Fidelity Investments have attracted a net $3.9-billion since they began trading on 11 January. Meanwhile, the so-called bitcoin halving due in April will curb supply of the largest digital asset, a development viewed by many as a prop for prices based on historical precedent.
“The recent price rally likely reflects strong net inflows into US spot bitcoin ETFs,” said Zach Pandl, MD of research at crypto fund provider Grayscale Investments.
Ether has been slower than bitcoin in climbing back to levels preceding the terraUSD implosion in early May 2022, a psychologically important threshold given the devastation that event wrought. TerraUSD’s creator, Do Kwon, is being detained in Montenegro and awaiting extradition to either his native South Korea or the US, where he’s wanted on fraud charges.
Bitcoin has tripled since the start of last year in a comeback from the 2022 digital-asset rout. Wagers in the options market indicate traders are targeting prices beyond the record of almost $69 000 achieved in November 2021.
Read: One bitcoin now costs R1-million
The supportive narratives for bitcoin “help the whole crypto market, as correlations between BTC and other assets are high”, wrote Noelle Acheson, author of the Crypto Is Macro Now newsletter. — Suvashree Ghosh and Sidhartha Shukla, (c) 2024 Bloomberg LP