SINGAPORE - Bitcoin hovered around US$52,000 after a broad cryptocurrency rally that saw Ether, the second-biggest token, advance back to where it was before the TerraUSD stablecoin collapsed almost two years ago.
Bitcoin’s 22 per cent year-to-date gain has helped to lift the market capitalisation of digital assets above US$2 trillion (S$2.7 trillion) for the first time since April 2022, data from CoinGecko shows.
Bitcoin and Ether were up more than 1 per cent at one point on Feb 15 in Singapore, with the latter changing hands at US$2,785 at 9.37am.
Sector-specific factors have been supporting Bitcoin, including the debut of US exchange-traded funds (ETFs) dedicated to the token. The batch of products from the likes of BlackRock and Fidelity Investments have attracted a net US$3.9 billion since they began trading on Jan 11.
Meanwhile, a so-called Bitcoin halving due in April – when the rate of Bitcoin production is slashed – will curb supply of the largest digital asset, a development viewed by many as a prop for prices based on historical precedent.
“The recent price rally likely reflects strong net inflows into US spot Bitcoin ETFs,” said Mr Zach Pandl, managing director of research at crypto fund provider Grayscale Investments LLC.
Ether has been slower than Bitcoin in climbing back to levels preceding the TerraUSD implosion in early May 2022, a psychologically important threshold given the devastation that event wrought.
TerraUSD’s creator, Do Kwon, is being detained in Montenegro and awaiting extradition to either his native South Korea or the United States, where he is wanted over fraud charges.
The price of Bitcoin has tripled since the start of last year in a comeback from the 2022 digital-asset rout. Wagers in the options market indicate traders are targeting prices beyond the record of almost US$69,000 achieved in November 2021.
The supportive narratives for Bitcoin “help the whole crypto market, as correlations between BTC and other assets are high”, wrote Ms Noelle Acheson, author of the Crypto Is Macro Now newsletter. BLOOMBERG
