Bitcoin hits highest level in two weeks as big-money bets flow

[SINGAPORE] Bitcoin flirted with the US$54,000 level and hit a two-week high on Tuesday, aided by more signs of institutional interest in the largest cryptocurrency.

The digital token rose as much as 4.3 per cent and was trading at about US$53,900 as at 12.54pm in Hong Kong. Rival Ether also jumped, extending a two-day rally in the Bloomberg Galaxy Crypto Index to some 13 per cent.

"Bitcoin and Ethereum bullishness are back as more big-money bets keep flowing into cryptocurrencies," Edward Moya, senior market analyst at Oanda, wrote in an email. "Institutional interest still seems strong."

The narrative that longer-term investors such as family offices, insurers and corporate treasurers are adding exposure to tokens is controversial but gaining traction. Goldman Sachs Group recently said it's seeing substantial demand from institutions as it works to restart its cryptocurrency trading desk.

That marks out the current bull run in Bitcoin as different to the 2017 bubble that burst, according to Goldman Sachs. For sceptics, the crypto rally represents a prime example of speculative froth triggered by huge stimulus that could quickly unwind once financial conditions tighten.

Bitcoin is in a "strong position" to reach US$75,000, Evercore ISI strategist Rich Ross wrote in a note. The cryptocurrency has been through some wild gyrations and currently sits about US$4,500 off a record of US$58,350 achieved on Feb 21. It's up almost 600 per cent in the past year, a rally that dwarfs more traditional assets.

Ether, the second-largest token, has been rallying on the prospect of reduced supply amid an ongoing upgrade of the affiliated Ethereum blockchain.

US$1 BILLION

On Monday, NYDIG, a provider of Bitcoin custodial services to institutions, said life, annuity and property/casualty insurers have more than US$1 billion of direct and indirect Bitcoin exposure on its platform.

NYDIG also announced a US$200 million growth capital round led by strategic partners including Stone Ridge Holdings Group, Morgan Stanley, New York Life, MassMutual and Soros Fund Management, among others.

In recent days, oil billionaire Kjell Inge Rokke came out in favour of Bitcoin. Mr Rokke's Aker is setting up a new business to tap its potential. Over the weekend, Chinese beauty app Meitu said it invested in Ether and Bitcoin. Last month, Tesla said it invested US$1.5 billion in Bitcoin.

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