Bitcoin (BTC) surged above $57,000 Tuesday, putting it within striking distance of its all-time high as enthusiasm for the world’s largest cryptocurrency reached a level last seen during a 2021 boom.
The price of the digital asset is now up as much as 10% on the week and 35% so far this year, due largely to excitement sparked by a series of spot bitcoin exchange-traded funds that started trading in January.
By topping $57,000, bitcoin touched its highest point since November 2021. The current rally is testing whether the price can be pushed closer to its all-time high of $68,789. That apex came six months before a spectacular crash in 2022.
“Ultimately, what we’re seeing is crypto is kind of rising from the ashes of the 2022 market,” Ryan Rasmussen, a senior crypto research analyst for Bitwise Asset Management.
“Our assumption is that the price of bitcoin is going to achieve $125,000 by the end of 2025,” Benchmark’s Mark Palmer added on Yahoo Finance Live.
Investors are bidding other cryptocurrencies and related stocks higher too. Year to date, the second largest cryptocurrency, ether (ETH), has outperformed bitcoin by more than 10% while the total market value for all crypto assets is up roughly 30% to $2.15 trillion, according to Coinmarketcap.
One sign of surging enthusiasm for bitcoin is the trading activity in the bitcoin ETFs that launched in January, giving everyday investors widespread exposure to the digital asset. They have logged more than $6 billion in net flows as of Tuesday, according to data collected by London-based fund Farside Investors.
So far this quarter, bitcoin trading volume has surpassed levels seen for the same period in every quarter of 2023. That activity has been a boon to major crypto trading venues, including Coinbase Global (COIN) and Robinhood (HOOD). Those stocks are up 27% and 31%, respectively, since the beginning of January.
Bitcoin miner Marathon Digital (MARA) and bitcoin holder Microstrategy (MSTR) have risen 32% and 27%, respectively. MicroStrategy announced Monday morning that it acquired an additional 3,000 BTC, bringing its total investment to 193,000 BTC, which was valued at roughly $11 billion as of Tuesday.
Derivatives traders are also now piling into the bitcoin rally, according to Cumberland Labs analyst Christopher Newhouse.
There are approximately $24 billion of open contracts in the bitcoin futures market, according to crypto derivatives data provider Coinglass. That’s a new high for outstanding bitcoin futures bets, surpassing a mark last set in April 2021.
“In the options market, the narrative is clear,” Newhouse added. “People are bullish.”
David Hollerith is a senior reporter for Yahoo Finance covering banking, crypto, and other areas in finance.