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Retail trading activity has caused the price of Bitcoin to reach over a two-year peak of a little more than $56,000.
While the rally lost some momentum last week as the largest crypto ended its first week of decline in almost a month, Bitcoin soared above $56,000 in Monday's trade for the first time since 2021.
Bitcoin bulls took a break last week following an impressive rally lasting four weeks. After a significant increase in value, last week saw a period of investors selling to secure profits.
However, there is increasing confidence that continuous investor demand through exchange-traded funds (ETFs) will push the price of the major crypto back to its highest levels.
The OG digital currency surged as high as $56,700 on Tuesday morning. It last traded at that level in December 2021.
Investors have put in almost $5 billion in 10 ETFs that started trading last month.
Emmanuel Musa
Newhouse stated that there has been a significant rise in the open interest, which refers to the amount of outstanding contracts, for perpetual Bitcoin futures. Simultaneously, short positions have been compelled to be closed during the recent surge.
Contributing to the positive outlook on Bitcoin was MicroStrategy's significant acquisition of the tokens.
The enterprise software company, which has integrated purchasing Bitcoin into its corporate strategy, announced on Monday that it bought around 3,000 more tokens this month for $155.4 million. It holds around $10 billion worth of Bitcoin.
Retail investors are also euphoric about the spot Bitcoin ETFs and the forthcoming halving event, which has resulted in a 25% spike in the asset's price in recent weeks.
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Strategists at JP Morgan Chase noted that the halving event is probably already included in Bitcoin's current price, even though the adjustment will occur in April.
But other traders expect with the next April halving event, which reduces supply, Bitcoin may surge further.
On the other hand, JP Morgan observes an increase in retail traders participating in cryptocurrency markets in February.
These mall-scale investors are returning to the cryptocurrency markets after a halt in January, driving prominent cryptocurrencies like Bitcoin and Ether to multi-year highs, according to JP Morgan strategists.
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