(Feb 27): Bitcoin retook the US$57,000 (RM271,434) level for the first time since late 2021, supported by investor demand through exchange-traded funds (ETFs), as well as further purchases by MicroStrategy Inc.

The digital asset added as much as 4.4% to reach US$57,039, before paring some of the jump to trade at US$56,085 as of 6am on Tuesday in London. Bitcoin’s price has increased 32% since the turn of the year, extending a prolonged rally that has also stoked speculative appetite for smaller tokens like Ether and Dogecoin.

A net US$6.1 billion has poured into a batch of landmark bitcoin ETFs that began trading in the US on Jan 11, signalling widening demand for the token beyond committed digital-asset enthusiasts. An upcoming reduction in bitcoin’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 on Monday that it had purchased another 3,000 or so tokens this month. The company now owns about US$10 billion in bitcoin.

“We do not expect a major pullback from bitcoin, given its breakout and positive intermediate-term momentum,” Katie Stockton, the founder of Fairlead Strategies, wrote in a note.

The combined value of digital assets now stands at roughly US$2.2 trillion, according to CoinGecko, compared with a low of about US$820 billion during the bear market of 2022, when FTX and other crypto platforms collapsed.

Rising yields

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.

Coinglass data showed that about US$162 million worth of crypto trading positions betting on lower prices had been liquidated over Monday and Tuesday — one of the biggest two-day tallies since at least Nov 30.

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 in 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 on Tuesday in companies such as Japan’s Monex Group and Woori Technology Investment Co in South Korea.