Bitcoin has approached the $80,000 level for the first time since January, supported by new inflows into spot exchange-traded funds and large purchases from 'Strategy', led by well-known crypto advocate Michael Saylor.
According to Bloomberg, the rise of Bitcoin has been calm, not driven by widespread market enthusiasm, but by short covering and continued accumulation of purchases from 'Strategy', which bought $3.9 billion worth of Bitcoin this month, according to data collected by Bloomberg.
Exchange-traded funds (ETFs) are a portfolio of assets (stocks, bonds, or commodities) traded on the exchange just like regular stocks. Instead of buying a single company's stock, you're buying a share in a massive portfolio that includes hundreds of companies.
The term "short selling" refers to traders betting on the decline of a financial asset's price, like Bitcoin, by selling contracts or positions linked to it, hoping to buy them back later at a lower price and profit from the difference. When the price moves against their expectations and starts to rise, they are forced to close their positions by buying the asset or the associated contracts, which is known as covering their short positions. This can add upward momentum due to the additional demand.