Bitcoin reached a peak not seen in two years on Tuesday, driven by indications of significant purchases of the cryptocurrency by major players. Meanwhile, its smaller counterpart, ether, surpassed $3,200 (equivalent to approximately ( KES 467,200), marking its highest value since 2022.
Bitcoin has surged by over 10% over the course of two trading sessions, boosted by news from crypto investor and software company MicroStrategy. The company revealed on Monday that it had acquired approximately 3,000 bitcoins, spending $155 million (approximately KES 22.7 billion).
Recently, the original and largest cryptocurrency by market value has seen a boost due to 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.
“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.
Currently, a significant motivating factor is the upcoming bitcoin halving event scheduled for April. This is intended to decrease the pace of bitcoin issuance, as the cryptocurrency’s total supply is limited to 21 million coins, with approximately 19 million already in circulation. The halving process involves reducing the reward for mining new bitcoins by 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 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.
