Bitcoin tops $57,000 for first time since late 2021

The price of the largest cryptocurrency has increased by 33% this year on exchange-traded fund demand

More than $5.5 billion has been poured into a batch of landmark Bitcoin ETFs that began trading in the US on January 11. Bloomberg
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Bitcoin retook the $57,000 level for the first time since late 2021, supported by investor demand through exchange-traded funds, as well as further purchases by MicroStrategy.

The digital asset added as much as 4.4 per cent to reach $57,039 before paring some of the jump to trade at $55,856.84 as of 9.20am UAE time on Tuesday.

Bitcoin’s price has increased by 33 per cent since the start of the year, extending a prolonged rally that has also stoked speculative appetite for smaller tokens such as Ether and BNB.

A net $5.6 billion has poured into a batch of landmark Bitcoin ETFs that began trading in the US on January 11, signalling a widening of demand for the token beyond committed digital-asset enthusiasts.

A coming reduction in the token’s supply growth, described as the halving, is adding to the optimistic sentiment.

MicroStrategy, an enterprise software company that buys Bitcoin as part of its corporate strategy, said on Monday that it had purchased another 3,000 or so tokens this month.

The company now owns about $10 billion worth of Bitcoin.

“We do not expect a major pullback from Bitcoin given its breakout and positive intermediate-term momentum,” 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, compared with a low of about $820 billion during the bear market of 2022, when FTX and other cryptocurrency platforms collapsed.

Digital tokens are jumping even though investors have pared back expectations for looser monetary policy this year, evidenced by a rise in US Treasury yields.

“Bullish momentum in crypto is unfolding despite an uptick in rates,” Sean Farrell, head of digital asset strategy at Fundstrat Global, wrote in a note.

Bitcoin has outperformed traditional assets such as stocks and gold this year. A ratio comparing the price of the token to the precious metal is at its highest level in more than two years.

Shares of cryptocurrency-related companies gained in the US on Monday. MicroStrategy rose by 16 per cent, trading platform Coinbase Global was up 17 per cent and miner Marathon Digital Holdings jumped 22 per cent.

Updated: February 27, 2024, 6:32 AM