The most dominant cryptocurrency on the market is authoring a dramatic comeback.
After a large dip last Thursday, when Bitcoin dropped below $25,000 in response to the U.S. central bank’s hawkish tone during an announced pause on interest rate increases, the cryptocurrency crossed the $30,000 mark on Wednesday.
In one day, the price of one Bitcoin increased more than 12%, rising from just above $27,000 to almost $30,700, the highest mark in over a year. The cryptocurrency had previously passed the $30,000 threshold in April at about $30,400, which was then the highest peak it had summited since it dropped to almost $16,000 just months earlier.
The crypto market has echoed the sudden surge, with Ether, the native token for the Ethereum blockchain, up 8.5% to about $1,900. And unsurprisingly, given Bitcoin’s dominance, the total market capitalization for all cryptocurrencies has jumped to approximately $1.17 trillion, a more than 8% increase over the past day. Bitcoin’s price rally is out of step with the broader stock market, as the S&P 500 and the Nasdaq are slightly down in the past 24 hours.
The surge in Bitcoin’s price follows a rush of recent interest from institutional investors in Bitcoin and the crypto market.
“Investors are starting to see the massive scale of institutional and professional capital that’s going to enter the market over the next few years,” Matt Hougan, chief investment officer at Bitwise Asset Management, told Fortune. “They’re trying to get in early.”
Shortly after the Federal Reserve’s announcement last Thursday, BlackRock filed an application for a Bitcoin spot exchange-traded fund that, if approved, would be the first of its kind in the U.S. and expose the cryptocurrency to potentially trillions of dollars from retail investors and pension funds. The price of Bitcoin jumped after the news and stayed steady at around $27,000.
On Tuesday, further news of institutional investment buoyed the crypto market. EDX Markets, an exchange backed by TradFi titans Citadel, Charles Schwab, and Fidelity, announced its launch. Then two other asset managers joined the ETF application fray, as WisdomTree and Invesco filed separate applications for Bitcoin spot ETFs. “There is a greater recognition in the market that Bitcoin is becoming a mainstream asset class,” Paolo Ardoino, CTO of crypto exchange Bitfinex, told Fortune. “We’re seeing some of the biggest investment funds becoming interested once more in the asset.”
Some analysts, however, are striking a more measured tone.
“It will be interesting to see if this new wave of institutional buying is sustainable,” Michael Safai, managing partner at crypto trading firm Dexterity Capital, told Fortune in an email, “and whether these firms will join their hedge fund peers in looking beyond just the top two or three coins.”
Update, June 21, 2023: This article has been updated with a comment from Bitwise and Dexterity Capital.