Bitcoin, Ethereum, and other major cryptocurrencies rallied even higher this week. This added $100 billion to the total crypto market value. So, what was the reason behind the rise? Here are the details of the price change…
What was the reason for the rise in Bitcoin and altcoins?
Bitcoin price surpassed $25,000 per Bitcoin for the first time since last summer as traders bet the Fed could make a dramatic U-turn and the US fears a growing war against crypto. Now, data has revealed that this week’s $100 billion Bitcoin, Ethereum and crypto price boom could be triggered by institutional investors pouring over $1.5 billion into the crypto market. Bitcoin and crypto data analysts at Lookonchain linked on Twitter to several “mysterious” addresses and summarized how the USDC stablecoin issued by Circle is being used. “We found that several funds/institutions have poured approximately $1.6 billion into the crypto market since Feb. 10.” said.
USDC is the second largest stablecoin in the world with a total market capitalization of approximately $42 billion. Tether, the largest stablecoin, has a total valuation of just over $70 billion. Bitcoin and the crypto market fell below $1 trillion this week after reports of legal action against another coin, the $13 billion Binance-branded, dollar-pegged stablecoin BUSD, issued by Paxos. BUSD saw nearly $3 billion in redemptions this week as traders withdrew cash from the stablecoin.
Binance CEO said via Twitter that he expects the number of BUSD in circulation to drop further after Paxos is ordered to stop issuing BUSD. Reporting to New York’s top financial regulator of data suggesting that Binance does not have enough reserves to support BUSD by the Circle, reported by Bloomberg, has inflamed the struggle among stablecoin issuers fighting for market dominance.
Macroeconomic developments continue to affect the markets
Meanwhile, the latest US inflation showed consumer prices continued to cool, rising 6.4 percent year on year in January, raising hopes that the Fed could declare victory in its battle against rising inflation later this year. “As we’ve been saying for three months, US inflation data will likely drop further and we’ve had a strong rally, which is not surprising,” Matrixport head of research Markus Thielen said in a note. According to Cryptokoin.com data at the time of writing, Bitcoin is changing hands at $24,714 in the last 24 hours without any change. The coin has gained 12.9 percent in the last seven days.
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