Bitcoin experienced a remarkable surge on Tuesday morning, with its price soaring over 10% to reach a high of $56,740, marking its highest value since November 2021.
According to Lucy Hu, a senior analyst at Metalpha, a significant factor driving this surge is the trading volume of Bitcoin spot ETFs, which reached a new peak of $2.4 billion on February 26. This surge in trading volume has further enhanced the confidence of U.S. investors in the cryptocurrency asset class.
Ether, another prominent cryptocurrency, also saw a notable increase, rising by 4.7% over the past 24 hours to trade at $3,234 at 10:30 a.m. in Hong Kong, according to data from The Block. Additionally, the GMCI 30 Index, which measures the performance of the top 30 cryptocurrencies, surged by 6% in the same timeframe, reaching a value of 122.05.
Justin d’Anethan, head of APAC business development at Keyrock, a crypto market maker, commented on the sustained rise of Bitcoin, attributing it to the asset’s finite supply relative to inflationary fiat currencies. He highlighted the upcoming halving of Bitcoin’s supply, emphasizing the relentless demand fueled by U.S. spot ETFs.
The surge in Bitcoin’s price coincided with a record-high combined daily trading volume of $2.4 billion for nine new spot bitcoin exchange-traded funds (ETFs), excluding Grayscale’s converted fund, during Monday’s trading sessions. d’Anethan suggested that traditional investors may be seeking short-term profits following MicroStrategy’s acquisition of an additional 3,000 BTC.
Moreover, d’Anethan noted a growing enthusiasm for the Bitcoin ecosystem, particularly as macro markets appear to underperform. He also observed increasing interest in Ethereum (ETH), which surpassed the $3,200 mark in Asia on the back of Bitcoin’s rally. He speculated that anticipation about a potential spot ETF for Ethereum later this year may have contributed to its rise.
It is worth noting that amidst a broader crypto market rally, Bitcoin scaling tokens and BRC-20 coins also surged, surpassing the performance of the wider crypto markets and even Bitcoin itself, despite tapping its own 25-month high.
Notably, Bitcoin layer-2 network tokens like Stacks (STX) and RSK Infrastructure Framework (RIF) experienced double-digit gains. Stacks, a Bitcoin-focused smart contract platform, saw a significant uptick, skyrocketing 30% from an intraday low of $2.44 to a peak of $3.21 on February 27, doubling its price over the past 30 days. This surge brought the STX token within 9% of its December 2021 all-time high.
Additionally, RIF, the native token for the RSK Infrastructure Framework, surged by 25% from its intraday low of $0.193 to $0.242 before a slight pullback. The Rootstock Infrastructure Framework, built on top of the Rootstock blockchain, facilitates smart contract capabilities for Bitcoin without compromising its core principles, enabling the deployment of decentralized applications (DApps).
Other Bitcoin-related scaling and smart contract tokens, such as MAP and various BRC-20 tokens, including MUBI, TRAC, INSC, and MEME, also demonstrated notable gains, with MAP reaching $0.035 during early trading on February 27.
