The Bitcoin (CRYPTO: BTC) price broke into new 2022 highs overnight, reaching US$48,087 (AU$64,323).
The price has since retreated a touch, currently at US$47,444.
The Bitcoin price spike sent the token above levels last seen in the first days of January. And it's now up 15% since this time last week.
That gives the world's original and biggest crypto a market capitalisation of US$900.7 billion.
So, what's driving the surge?
Image source: Getty Images
Why is the Bitcoin price charging higher?
Antoni Trenchev is the co-founder of crypto exchange Nexo.
Commenting on the Bitcoin price resetting its 2022 highs, Trenchev said (quoted by Bloomberg):
As we test the top of the 2022 trading range for the fifth time, this is another one of these Bitcoin moments when the narrative could swiftly change and investors pile in, propelling the Bitcoin price higher. It might just be time to awaken from the Bitcoin-sideways slumber that's been 2022.
Michael Sonnenshein, CEO of crypto asset manager Grayscale, added:
It's been a choppy start to the year, not just for crypto, but across all asset classes. So, I think certainly, it's an exciting morning in the crypto community to see that year-long, so far, of losses erased, and also seeing Bitcoin break out above that psychological US$45,000 level.
Sonnenshein pointed out there are also "a couple of native crypto buyers like Terra buying for their own reserves".
Just how much has Terra been buying?
The Luna Foundation is behind the stablecoin TerraUSD (CRYPTO: UST) and its blockchain.
And, according to eToro's market analyst and crypto expert Simon Peters, the foundation's major recent investments could be helping support the Bitcoin price.
"The Luna Foundation has accumulated fresh reserves of around 24,955 Bitcoins, worth roughly US$1.1 billion," Peters said.
Peters continued:
The foundation is accumulating bitcoin in order to stabilise UST. Crypto community sleuths have followed a trail of Bitcoin buying in recent days that end with wallets believed to be held by the foundation…
It has previously bought around $2.2 billion-worth of Bitcoin meaning the foundation is now a serious whale in the market. The Luna Foundation's goal is to build a US$10 billion bank of Bitcoin. So, the support this movement is providing to markets could continue for some time.
The Bitcoin price is still 31% below its 10 November all-time highs of US$68,790.
But that figure will likely be a lot more palatable to crypto investors than the 50%-plus losses it was sitting on just a few weeks ago.
