Is This The Real “Mysterious” Reason Behind The Sudden $100 Billion Bitcoin, Ethereum And Crypto Price Boom?
Bitcoin, ethereum and other major cryptocurrencies have surged higher this week, adding $100 billion to the combined crypto market that some believe is going “parabolic.”
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Bitcoin prices have topped $25,000 per bitcoin for the first time since last summer, as traders bet the Federal Reserve could make a dramatic U-turn and despite fears of a growing US war on crypto.
Now data has revealed this week’s $100 billion price boom in bitcoin, ethereum and crypto could have been triggered by institutional investors pouring over $1.5 billion into the crypto market.
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“We found that multiple funds/institutions poured nearly $1.6 billion into the crypto market since February 10,” bitcoin and crypto data analysts at Lookonchain posted to Twitter, linking to several “mysterious” addresses and outlining how the Circle-issued USDC stablecoin was used to send funds to various exchanges.
USDC is the world’s second largest stablecoin with a total market capitalization of nearly $42 billion. TetherUSDT, the largest stablecoin, has a total value of just over $70 billion.
The Bitcoin and crypto market fell below $1 trillion this week following news of regulatory action against another major stablecoin, BUSDBUSD – a $13 billion Binance-branded, dollar-pegged stablecoin issued by Paxos.
BUSD has seen nearly $3 billion in redemptions this week as traders cash out of the stablecoin. CEO of Binance so via Twitter, he expected the number of BUSD in circulation to fall further after Paxos was ordered to stop issuing it.
New York’s top financial regulator was tipped off about data suggesting Binance didn’t have enough reserves to support BUSD by Circle, it was reported by Bloombergescalating the battle between stablecoin issuers as they battle for dominance of the market.
Meanwhile, the latest US inflation showed consumer prices continued to cool in January, rising at an annual rate of 6.4% and fueling hopes that the Fed could declare victory in its war on rising inflation later this year.
“As we have been saying for three months now, the US inflation data is likely to fall further and not surprisingly, we had a strong recovery,” Markus Thielen, head of research at Matrixport, wrote in an emailed statement.
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However, some long-term bitcoin price watchers are reluctant to call the end of the recent bear market, known as crypto winter, and the beginning of a bitcoin and crypto price spring.
“Bitcoin’s price has been on a strong upward trend since the beginning of the year, but those who have been in the crypto space for several cycles are loathe to call a rally the start of a bull market,” Alex Adelman, CEO of bitcoin rewards app Lolli, said by e-mail.
“Although bitcoin’s current rise in price and trading volume indicates increased market confidence, ongoing price trends will continue to be driven by regulation, inflation and other developments in the crypto industry. While crypto markets have started the year on a high note, the collapse of FTX weakened many companies and individuals in the crypto space, and there may well be more victims from the fallout.”
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