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

Bitcoin tops $57,000 price level for first time since late 2021
A Bitcoin logo in the window of a cryptocurrency exchange office in Prague, Czech Republic, on Friday, Jan. 5, 2024. (Photo: Milan Jaros/Bloomberg)

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 Inc.

The digital asset added as much as 4.4% to reach $57,039 before paring some of the jump to trade at $56,473 as of 10.22am on Tuesday in Singapore. Bitcoin’s price has increased 33% since the turn of the year, extending a prolonged rally that has also stoked speculative appetite for smaller tokens like Ether and BNB.

A net $5.6-billion has poured into a batch of landmark Bitcoin ETFs that began trading in the US on 11 January, signalling a widening of demand for the token beyond committed digital-asset enthusiasts. An upcoming reduction in the token’s supply growth, the “halving”, is adding to the optimistic sentiment.

MicroStrategy, an enterprise software firm that buys Bitcoin as part of its corporate strategy, said Monday that it had purchased another 3,000 or so tokens this month. The company now owns about $10 billion in Bitcoin.

Read more: MicroStrategy Purchases Another 3,000 Bitcoin for $155.4 Million

“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 roughly $2.2-trillion, according to CoinGecko, compared with a low of about $820-billion during the bear market of 2022 when FTX and other crypto 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,” Fundstrat Global Advisors Head of Digital-Asset Strategy Sean Farrell wrote in a note.

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

Shares of crypto-related companies gained in the US on Monday. MicroStrategy rose 16%, trading platform Coinbase Global Inc. increased 17% and miner Marathon Digital Holdings Inc. jumped 22%.

The positive sentiment spread to Asian stocks related to digital assets, including advances Tuesday in companies such as Japan’s Monex Group and Woori Technology Investment Co. in South Korea.

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