The 'Mysterious' Reason Behind the Sudden $100 Billion Price Boom of Bitcoin, Ethereum, and Crypto.

Last week, Bitcoin, Ethereum, and other major cryptocurrencies skyrocketed, adding $100 billion to the overall cryptocurrency market, which some belief is "going parabolic."

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The bitcoin price has surpassed $25,000 per bitcoin for the first time since the summer of 2017 as traders bet the Federal Reserve may do a major about-face amid worries of a rising U.S. war on cryptocurrencies.

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Today, data indicates that the $100 billion bitcoin, Ethereum, and cryptocurrency price surge this week may have been prompted by institutional investors pumping over $1.5 billion into the cryptocurrency market.

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"We discovered that several funds/institutions poured nearly $1.6 billion into the crypto market since February 10," bitcoin and crypto data analysts at Lookonchain tweeted, linking to several "mysterious" addresses and describing how the Circle-issued USDC stablecoin was used to transfer funds to various exchanges.

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USDC is the second-largest stablecoin in the world, with a total market valuation of about $42 billion. The value of the largest stablecoin, TetherUSDT 0.0%, is a little over $70 billion.

Following rumors of regulatory action against another big stablecoin, BUSDBUSD 0.0%—a $13 billion Binance-branded, dollar-pegged stablecoin produced by Paxos—the bitcoin and cryptocurrency market fell below $1 trillion this week.

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Over $3 billion worth of BUSD has been redeemed this week as traders sell the stablecoin. Once Paxos was forced to cease issuing BUSD, Binance's CEO predicted on Twitter that the quantity of BUSD in circulation would continue to plummet.

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Trade Algo reported that Circle informed New York's top financial regulator that Binance lacked sufficient reserves to support BUSD, increasing the contest between stablecoin issuers for market supremacy.

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In the meantime, the most recent data on U.S. inflation indicates that consumer prices continued to decline in January, growing at an annual rate of 6.4% and bolstering optimism that the Federal Reserve will proclaim success in its campaign against skyrocketing inflation later this year.

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Markus Thielen, head of research at Matrixport, stated in an emailed note, "As we've been predicting for the last three months, the U.S. inflation statistics will likely decline further, and it's no surprise that we saw a significant rally."

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However, some long-term bitcoin price observers are hesitant to declare the conclusion of the previous bear market, often known as crypto winter, and the start of a bitcoin and cryptocurrency price spring.

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"Bitcoin's price has been rising substantially upward since the beginning of the year, but many who have been in the crypto industry for numerous cycles are hesitant to declare any rise at the beginning of a bull market," said Alex Adelman via email, the CEO of bitcoin rewards app Lolli.

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"Although the recent jump in bitcoin's price and trading volume indicates increasing market confidence, future price patterns will continue to be influenced by regulation, inflation, and other events in the crypto sector. While crypto markets have begun the year on a positive note, the collapse of FTX has hurt many organizations and individuals in the crypto field, and there may be further fatalities."

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