Bitcoin price has returned to above $57,000 for the first time since late 2021, supported by investor demand via exchange-traded funds for the currency, as well as additional buying by MicroStrategy.
The digital asset advanced about 4.4% to $57,039 before giving back some gains to trade at $56,473 at 10:22 a.m. Singapore time on Tuesday.
Bitcoin has surged 33% since the start of the year, extending a long-running rally that has also whetted speculators’ appetite for smaller cryptocurrencies like Ethereum and BNB.
Bitcoin exchange-traded funds (ETFs) have received $5.6 billion in new inflows since they began trading in the United States on January 11, indicating that demand for the token is expanding to include new audiences beyond just committed digital asset investors.
The upcoming Bitcoin halving event, which cuts the reward for miners of the cryptocurrency in half, also boosts the bullish outlook.
MicroStrategy, an enterprise software company that buys bitcoin as part of its strategy, said Monday it has bought 3,000 or so new coins this month. The company now holds an estimated $10 billion worth of bitcoin.
Bitcoin outperforms traditional assets
Bitcoin has outperformed other assets like gold this year. “We don’t expect a major pullback in Bitcoin given the strength of its upside and positive momentum in the medium term,” Katie Stockton, founder of Fairlead Strategies, wrote in a note.
The combined value of digital assets now stands at about $2.2 trillion, according to CoinGecko data, compared to a low of about $820 billion during the 2022 bear market when FTX and other cryptocurrency platforms collapsed.
Cryptocurrencies are also making big gains even as investors have scaled back expectations for U.S. monetary policy easing this year, which is reflected in higher U.S. Treasury yields. The bullish momentum in cryptocurrencies continues even as interest rates remain high, Sean Farrell, head of digital asset strategy at Fundstrat Global Advisors, noted in a note.
The cryptocurrency has outperformed traditional assets like stocks and gold this year, with the ratio between Bitcoin and the precious metal hitting its highest level in more than two years.
Cryptocurrency Stocks
Shares of cryptocurrency-related companies in the United States rose on Monday. MicroStrategy shares rose 16%, trading platform Coinbase Global rose 17% and mining company Marathon Digital Holdings jumped about 22%.
The positive sentiment extended to Asian digital asset stocks as well, including a rally in companies such as Japan's Monex Group and South Korea's Woori Technology Investment on Tuesday.
