Investing.com -- The price of Bitcoin cleared key levels in Asian trade on Tuesday, and were now less than $1,000 shy of a record high hit during the peak of a bull run in 2021.
The world’s largest cryptocurrency had risen by 1.8% to $66,487 by 03:17 ET (08:17 GMT). Hours earlier it had surged by as much as 8.4% to an over two-year high of $68,450.9 -- within spitting distance of an all-time high of $68,999 reached in late-2021.
Gains in Bitcoin were driven chiefly by steady capital inflows into the token, especially after the approval of several U.S. exchange-traded funds that directly track the token’s price.
"When you open up ETF capital pools for a digital commodity with limited supply, the only price direction is up," analysts at Bernstein said in a note to clients.
Its correlation with technology stocks also factored into the token’s recent gains, while markets awaited an upcoming halving in the rate at which new Bitcoin is generated- an event that is expected to tighten markets.
Data from digital asset manager CoinShares showed Bitcoin-linked investment products saw a fifth straight week of capital inflows in the week to March 4, a total of $1.7 billion. While short positions on the token increased, U.S.-listed ETFs tracking Bitcoin, particularly offerings from BlackRock (NYSE:BLK) (NASDAQ:IBIT) and Fidelity (NYSE:FBTC), commanded the lion’s share of inflows.
On the other hand, Grayscale (NYSE:GBTC) continued to see sustained outflows, as it grappled with increased competition in the Bitcoin ETF space.
Sentiment towards Bitcoin was also boosted by Microstrategy (NASDAQ:MSTR), the largest corporate holder of the token, saying it will issue $600 million in debt to buy more Bitcoin.
World no.2 crypto Ethereum touched a two-year high of $3,624.03, as focus also remained on the potential approval of a spot ETF for the token. Crypto-linked stocks also rallied on Wall Street on Monday.
Still, crypto trading volumes, particularly in Bitcoin and Ethereum, have been relatively subdued. While Bitcoin has rallied more than 400% from lows hit in late-2022, retail interest in crypto has remained weak following several high-profile frauds and bankruptcies over the past two years.
Ambar Warrick contributed to this report.