Cryptocurrency investments are increasing, driving up the price of the original coin.
The world's largest cryptocurrency by market capitalization is recovering due to the growing appetite of large investors. The price of Bitcoin rose 10% in two days and was trading at more than $56,000 (51,606 euros), the highest level since November 2021.
The CoinDesk Bitcoin Price Index (XBX) had a high of $56,940.18 (โฌ52,472.08) in the last 24 hours, but the index dropped to around $56,500 (โฌ52,0660) on Tuesday morning in Europe.
One of the main drivers of the current rally was cryptocurrency investor and software company MicroStrategy, which announced a large purchase of 3,000 bitcoins for $155 million (โฌ143 million).
Cryptocurrencies are increasingly preferred by institutional investors.
"According to CoinShares, investment in crypto funds increased by $598 million (โฌ551 million) last week, following a record inflow of $2.452 billion (โฌ2.26 billion) the previous week," said the senior analyst at FxPro market, Alex Kuptsikevich. "Investments in bitcoin increased by 570 million dollars (570 million euros)."
The total capitalization of the crypto market exceeds 2 trillion dollars (1.84 trillion euros), approximately equivalent to the GDP of Italy, the third largest economy in the EU.
How high can the price of Bitcoin go?
According to a recent report, Bitcoin is expected to reach a new record of $88,000 (โฌ82,000) throughout 2024, before settling around $77,000 (โฌ70,957) by the end of the year.
The recent approval of bitcoin-owning exchange-traded funds (ETFs) made Bitcoin available to a wider selection of investors, driving up prices.
"Supply is limited... but the demand unleashed by US spot ETFs appears to be relentless," Justin d'Anethan of Keyrock, a digital asset market maker, told Reuters.
"Bitcoin and Ethereum [the world's second-largest cryptocurrency] are the cryptocurrencies of choice for institutional speculators," Kuptsikevich said, adding that the latter are expected to get their ETFs approved later this year, which could see more investors flock to the asset.
A wide expected called halving event (decrease in supply) It is also expected to increase the price in April.
"Bitcoin is gaining popularity as a safe-haven asset in countries with persistently high inflation," Kuptsikevich said, citing the opinion of cryptocurrency exchange Bitfinex on the matter. "Macroeconomic risks this year make it relevant to buy the first cryptocurrencyGold and silver."
The analyst sees no significant barriers for Bitcoin to rise "around all-time highs of $69,000 (63,585 euros)" as optimism is fueled by a rapid increase in predictions that the price will soon reach six figures.
Kuptsikevich himself believes that the price will most likely rise above $100,000 (92,500 euros) within the next nine to 12 months. However, he added: "If markets come under pressure from an economic slowdown, it could take more than a year to reach a new level."
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