Bitcoin briefly touched $57,000, the highest price seen since December 2021, as it smashed out of the consolidation pattern seen last week.
The price surge comes after a week of consolidation which may have to be down to a slow down in the amount of bitcoin being bought by the spot ETFs versus prior weeks, writes Simon Peters, cryptoasset market analyst at multi-asset investment platform eToro.
According to data taken from each ETF provider’s published bitcoin holdings, last week saw around 11,200 BTC net being bought by the spot ETFs versus 18,800 BTC, 26,200 BTC and 44,400 BTC in the 3 weeks prior.
It is not clear exactly what caused the price to rocket to $57,000, but there were some bullish announcements circling around crypto twitter yesterday.
Firstly Microstrategy Inc, the publicly listed software company who has made buying bitcoin part of their corporate strategy announced yesterday via their founder Michael Saylor that they bought 3000 more bitcoin ($155 million), taking their total bitcoin holdings to 193,000 bitcoin (approximately $6.09 billion).
Secondly, we saw a record day in trading volume for the bitcoin spot ETFs ($2.4 billion), with Blackrock’s iBIT accounting for $1.3 billion. Also the spot ETFs accumulated around 9000 bitcoin yesterday, 10 times the daily new supply of bitcoin which comes into circulation from block rewards.
Ethereum has also pushed higher over the week, breaking back through the $3000 price level, the highest price since April 2022, likely in anticipation of the upcoming ‘Dencun’ upgrade to the Ethereum mainnet and trending with the overall current bullishness in the crypto market. According to Yahoo Finance ethereum is currently trading at $3,225.
THE WEEK AHEAD
Focus switches back to inflation data this week as the latest US PCE (Personal Consumption Expenditure) print is set to be released on Thursday 29th February.
More focus will be on the Core PCE print which excludes the more volatile food and energy components making it somewhat easier to see the underlying inflation trend.
Although the Federal Reserve has pretty much ruled out a cut to interest rates at the upcoming March meeting, a PCE print lower than forecast could increase the probabilities of a cut happening at the following meeting in May.
As we’ve seen historically, increased anticipation of cuts to interest rates has generally been positive for cryptoasset prices, as well as stocks.
LAST WEEK’S MOVERS
Filecoin to provide decentralized storage solution for Solana blockchain
Filecoin (FIL) was one the best performing cryptoassets last week, gaining 30%.
Filecoin is a cryptoasset that powers the Filecoin network, a decentralised peer-to-peer file storage system.
The continued price rise of FIL follows an announcement last week that the network will begin storing Solana’s block history, making this data “more accessible and usable for infrastructure providers, explorers, indexers, and anyone needing historical access”.
“By leveraging Filecoin’s decentralized storage capabilities, @solana can achieve data redundancy, scalability, and enhanced security while staying true to its decentralized ethos” the tweet added further.
Currently FIL is trading at $8.1526 according to Yahoo Finance.
EYE-CATCHING STORIES
UK hopes to have new ruling governing stablecoins and staking within six months
As reported by Bloomberg, The UK government hopes to get new rules governing stablecoins and cryptoasset staking services approved by lawmakers within the next six months.
Speaking at an event in London on February 19th Bim Afolami (Economic Secretary to the Treasury) said that the government is “pushing very hard” on having the new legislation passed before the next general election.
“We’re very clear that we want to get these things done as soon as possible. And I think over the next six months, those things are doable” Afolami said.
In 2022 UK Prime Minister Rishi Sunak (then Chancellor of the Exchequer) first pledged to make the UK a global hub for cryptoasset technology and to pave the way for stablecoins to be used in the UK as a recognised form of payment, however little progress has been since then.
If the new legislation is passed in time, this could attract more digital-asset businesses and investment to come to the UK in the months and years to come.
