Bitcoin extended its gains Tuesday, touching a more than two-year high above $57,000.
The price of the flagship cryptocurrency was last higher by 5% at $57,328.95, according to Coin Metrics. Earlier, it reached $57,445.14, its highest level since December 2021.
"Now that we're that much closer to retesting bitcoin's record high, the market is that much more motivated to see the level retested and broken," said Joel Kruger, market strategist at LMAX Group.
On Monday, bitcoin awoke from a week of sideways trading to jump more than 7% and reach $54,000 for the first time since December 2021.
"Bitcoin's economics dictate that with the floodgates opened to traditional markets and mainstream adoption underway, the added demand for such a scarce asset should easily translate to a push well beyond the record high from 2021," Kruger added, referencing the new U.S. spot bitcoin exchange-traded funds and investors' "promising reception" toward them. "The fact that this comes at a time when global sentiment is running high and U.S. equities are making record gains is definitely not hurting the cause either."
Bitcoin has gained 24% since the ETFs began trading on Jan. 11. Ryan Rasmussen, an analyst at Bitwise Asset Management, said the positive effect on price so far is just the tip of the iceberg.
"The demand that ETFs are bringing to the spot bitcoin market is significantly more than the new supply being produced each day," he said. "When it comes down to supply and demand, there is far more demand for bitcoin right now than supply — that has a direct impact on price … Institutional capital is still getting up to speed with bitcoin ETFs. I expect a lot more demand is still under the surface and yet to be seen."
Bitcoin is less than 20% off its November 2021 all-time high of $68,982.20. Investors are expecting it to set a new record after the launch of ETFs and with the network's upcoming halving event, which historically has set the stage for a major rally in the months that follow.
Other cryptocurrencies trailed bitcoin after notching big gains with it Monday. Ether rose just 1%, while the tokens tied to Solana, Cardano and Polygon fell.
Most crypto equities were on pause, too, with the exception of Microstrategy, which was trading 7% higher after Benchmark Company initiated coverage of the stock with a buy rating and said it sees about 24% upside on the stock. Coinbase and CleanSpark added 1%, but other miners were in the red.
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