Today Bitcoin is trading above $47,000. The local high for the cryptocurrency from last night was $48,189. And that’s notably above the $33,000 that BTC traded for at the end of January 2022. Here’s a daily chart of the cryptocurrency’s exchange rate.

Bitcoin daily rate chart

Why is Bitcoin rising again?

The first reason is the announcement of a $10 billion bitcoin buying process by Terraform Labs, the cryptocurrency company behind the popular Terra project. Its CEO Do Kwon made the announcement almost a fortnight ago on his Twitter account. The purpose of such a huge purchase is to secure the TerraUSD (UST) stabelcoin promoted by the company.

Here is the relevant quote from the entrepreneur, in which he shared his own plans. The replica is cited by CryptoPotato.

UST with $10 billion in Bitcoin as reserves will usher in a new monetary era for the Bitcoin standard. It’s electronic P2P money that’s much easier to spend and more profitable simply to store.

Note that $10 billion in Bitcoin is a lot. MicroStrategy, the largest holder of BTC among publicly traded companies, is a case in point for comparison here. At the moment, the giant has 125,051 bitcoins in its possession, each of which has been bought for an average of $30,200. At today's exchange rate, that sum translates into $5.95 billion. Which means Terra executives want to spend almost twice as much on the first crypto.

The second reason comes directly from the first. BTC purchases by Terraform Labs will take place over a long period of time in roughly equal amounts of coins. Because of that, their supply on the market will decrease significantly. Here’s what cryptocurrency enthusiast under the nickname Pentoshi has to say about it.

Up to three thousand BTC per day “removed” from the market over a long period of time = huge impact on the crypto market. Those with short positions will at some point have to close them for a higher price, as the supply of coins itself “dissipates”. What was scarce becomes even more scarce.

In other words, a blockchain fan is sure that a significant decrease in the number of free coins in circulation will still make itself felt. Still, as there are fewer of them and the number of long-term holders grows, the competition for available bitcoins will get tougher over time. This will have a direct impact on the value of the asset - at least according to the theory of supply and demand.

Bitcoin exchange rate

Essentially what the analyst is talking about is the concept of a supply shock, where demand strongly outweighs supply. Under such conditions, one can only count on rapid growth, which sellers are no longer able to contain.

And the final prerequisite for growth is short-term optimism in the stock market. The S&P 500, Nasdaq and Dow Jones indices have been rising over the past few days. The crypto market still has a high level of correlation with growth in equities, so the positive trading in them is well reflected in Bitcoin as well.

S&P 500 exchange rate

Roughly speaking, the overall positive in the niche causes investors to exit stablcoin and put free money into positions. Accordingly, buying is pushing asset values up.

Green candles on the BTC chart, in turn, reflect well on altcoins. Of the top 50 coins by capitalisation, Filecoin, Internet Computer, VeChain and EOS have been the most profitable so far in recent days. Filecoin leads the list with a growth of 27 percent in a few days. However, the coin is still trading around 90 percent below its all-time high set in April 2021.

Filecoin exchange rate

Finally, a bit of news from the latest Bitcoin trading activity. According to Decrypt, the surge in the price of the main cryptocurrency has caused a massive shorting of around $142 million in just one day. We are talking about losses among those investors who were betting on a further collapse of the coin market.

As a reminder, liquidation is the forced closing of a margin trading position by an exchange if the dynamics of the value of an asset could make it unprofitable for the platform itself. It happens because traders do not use their own money for such positions, but borrowed money. Accordingly, in this way the exchange insures itself against potential losses.

Liquidation of positions in Bitcoin trading


We think the decentralized assets niche will continue to grow in popularity. Still, even Bitcoin is up 45 percent from its low at the end of January - an incredible return for traditional investment assets in such a short time frame. Given this trend, many investors outside of the coin market will surely connect with them. Well fresh capital affects asset values traditionally well.

Let’s hope the bull run continues into April – traditionally, this month is considered one of the best months for the crypto market. What do you think about it? Share your opinion in our millionaires’ cryptochat.