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The world’s largest cryptocurrency by market cap is rallying due to big investors’ growing appetite. Bitcoin’s price rose 10% in two days and was trading at more than $56,000 (€51,606), the highest since November 2021.

The CoinDesk Bitcoin Price Index (XBX) had a peak of $56,940.18 (€52,472.08) in the last 24 hours but the index lowered to around $56,500 (€52,0660) by Tuesday morning in Europe.

One of the main drivers of the current rally was crypto investor and software firm MicroStrategy announcing a large purchase of 3,000 bitcoins for $155 million (€143 million).

Cryptocurrencies are increasingly favoured by institutional investors. 

“According to CoinShares, investment in crypto funds rose by $598 million (€551 million) last week, following a record $2.452 billion (€2.26 billion) inflow the week before,” said FxPro senior market analyst Alex Kuptsikevich. “Investments in bitcoin rose by $570 million (€570 million).”

The capitalisation of the crypto market in total surpasses $2 trillion (€1.84 trillion), approximately the equivalent of the third biggest EU economy Italy’s GDP.

How high can the price of Bitcoin rise?

According to a recent report, Bitcoin is expected to reach a new record of $88,000 (€82,000) throughout 2024, before it settles around $77,000 (€70,957) at the end of the year.

The recent approval of bitcoin-owning exchange-traded funds (ETFs) made Bitcoin available for a wider selection of investors, pushing up prices. 

“There’s only so much supply … but the demand unleashed by the US spot ETFs seems to be relentless,” said Justin d’Anethan from Keyrock, a digital asset market maker to Reuters.

“Bitcoin and Ethereum [the world’s second-largest cryptocurrency] are the cryptocurrencies of choice for institutional speculators,” said Kuptsikevich, adding that the latter is expected to have its ETFs approved later this year, potentially seeing more investors flocking into this asset.

A widely expected so-called halving event (lowering supply) in April is also expected to drive up the price.

“Bitcoin is gaining popularity as a haven asset in countries with persistently high inflation,” said Kuptsikevich citing cryptocurrency exchange Bitfinex’s view on the matter. “Macroeconomic risks this year make it relevant to buy the first cryptocurrency, gold, and silver.” 

The analyst sees no significant barriers for Bitcoin to climb “around the historical highs at $69,000 (€63,585),” as the optimism is fed with a rapid increase of predictions that the price will soon reach six figures. 

Kuptsikevich himself thinks more likely than not, that the price will rise above $100,000 (€92.500)  between the next nine and 12-month period. However, he added: “If markets come under pressure from an economic slowdown, it could take more than a year to reach a new level.”  

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