Feb 26 2024: Bitcoin prices surged beyond the $56,000 mark on Tuesday, largely driven by signs of sustained capital inflows into spot exchange-traded funds (ETFs) introduced earlier this year.
The world’s leading cryptocurrency jumped nearly 10% to $56,256.9 by 21:48 ET (02:48 GMT), reaching its highest level in over two years. This put the token within striking distance of its all-time high set during a bullish period in late 2021.
Ethereum, the second-largest cryptocurrency globally, also experienced a notable rise of 3.6% to $3,217.48—its highest level since early 2022.
The surge in Bitcoin, along with the broader cryptocurrency market, was fueled by a report from digital asset manager Coinshares, indicating a fourth consecutive week of capital inflows into crypto investment products.
According to the report, digital asset investment products attracted weekly inflows of $598 million for the week ending February 23, with Bitcoin ETFs capturing a significant portion of these inflows.
Bitcoin products recorded $570 million in inflows, with BlackRock’s iShares Bitcoin Trust (NASDAQ:IBIT) witnessing $543.5 million in inflows. This largely offset substantial outflows from Grayscale Bitcoin Trust (BTC) (NYSE:GBTC) as it faced competition from numerous new entrants in the Bitcoin ETF arena.
Coinshares also highlighted accumulating short interest in Bitcoin following recent price surges. The token has appreciated by approximately 24% since the beginning of 2024, after more than doubling in value throughout 2023.
Further boosting Bitcoin’s performance, MicroStrategy Incorporated (NASDAQ:MSTR), the largest corporate holder of the token, announced its recent acquisition of 3,000 tokens for around $155 million.
Bitcoin’s remarkable rally this year was primarily catalyzed by the recent U.S. approval of ETFs directly tracking its price. However, while these approvals attracted a wave of institutional capital into the token, retail trading volumes have remained relatively subdued, particularly amidst the crypto industry grappling with widespread skepticism following a series of high-profile scandals and bankruptcies.