Bitcoin halving is an event that occurs approximately every four years, and reduces rewards to miners by half, effectively limiting the supply of tokens.
S3 Studio | Getty Images
Bitcoin, the world's largest cryptocurrency by market capitalization, extended its gains in Asian trading on Tuesday, reaching a two-year high of more than $56,000, pointing to positive developments in the market and crypto bulls. The overall cryptocurrency market was pushed up by the buying.
Bitcoin prices rose more than 10% in less than two days after crypto investment and software company MicroStrategy revealed on Monday that it had bought about 3,000 Bitcoins for $155 million, according to data from CoinMarketCap. .
Virginia-based MicroStrategy is currently the largest publicly traded owner of Bitcoin. Earlier this month, the company reported holdings of approximately 190,000 cryptocurrency tokens, worth more than $10.5 billion today.
Greta Yuan, head of research at digital asset platform VDX, said the market was “boosted by crypto bulls like MicroStrategy” and hit a “new record for Bitcoin ETF inflows.”
Most of the crypto markets have experienced an uptick since the recent rally. Ethereum, the second-largest cryptocurrency by market capitalization, has reached a multi-month high of over $3,200.
Cryptocurrency stocks also soared in U.S. trading, with MicroStrategy and San Francisco-based cryptocurrency exchange Coinbase both surging more than 16% on Monday and continuing to rise in aftermarket trading.
Two crypto companies have seen their stock prices rise 200% in the past year.
Alecia Haas, Coinbase's chief financial officer, said in an interview with CNBC last week that the company's recent strong results were due to regulatory approval of the Spot Bitcoin ETF in the U.S. last month, which makes the cryptocurrency He said it had sparked a new frenzy over the issue.
According to VDX's Yuan, the soaring Bitcoin price also reflects “bullish sentiment among investors, especially in the United States” ahead of the Bitcoin halving, which is scheduled for late April.
Bitcoin halving events occur every four years and reduce the reward for Bitcoin mining (the process by which transactions are digitally verified on the blockchain) by half, reducing the rate of creation of new Bitcoin tokens. New supply decreases. Available.
“As Bitcoin halving approaches, investors are scrambling to optimally position themselves for the event. A new record for Bitcoin ETF inflows is another sign of confidence for bullish investors. “, Yuan added.
Bitcoin's strong performance came amid a drop in the dollar value on Monday and Tuesday. Markets are betting that this week's U.S. economic data could signal when the Federal Reserve will start cutting interest rates.
Bitcoin prices and the US dollar index have historically shown an inverse correlation.
