- Bitcoin rebounded above $55,000 on Tuesday before paring its gains slightly.
- The recovery was boosted by Tesla saying it's committed to the world's biggest cryptocurrency.
- Bitcoin recently tumbled to around $47,000, its lowest in almost 2 months, after a sharp rally.
Bitcoin's rebound from recent lows continued on Tuesday, boosted by Elon Musk's Tesla saying it believes in the long-term value of the world's most traded cryptocurrency, as well as renewed interest from big players.
The digital asset was up 2.4% to $54,521 at 10.10 a.m. ET. It had earlier touched $55,020, around 17% higher than the almost 2-month low of close to $47,000 hit on Sunday.
Bitcoin remained well below its all-time high of close to $65,000, reached on April 14, however.
The cryptocurrency's rebound was boosted by Tesla's first-quarter earnings, released Monday. They showed the electric car company made a $101 million profit by selling 10% of its bitcoin holdings, which initially cost $1.5 billion in January.
"We do believe long term in the value of bitcoin," Zachary Kirkhorn, Tesla's chief financial officer, said in an earnings call. In March, Kirkhorn was given the title master of coin.
"So it is our intent to hold what we have long term and continue to accumulate bitcoin from transactions from our customers as they purchase vehicles."
The bounce in the dominant cryptocurrency has also been aided by renewed interest from major institutions, with JPMorgan planning a bitcoin fund for wealthy clients, according to Coindesk.
Tesla has been one of the major forces behind the boom in bitcoin, which is up more than 600% over the last year. Musk's company said in February it had bought $1.5 billion worth of bitcoin, sending the cryptocurrency surging.
Yet bitcoin has fallen sharply from recent all-time highs, which were reached as excitement built around the $100 billion direct listing of crypto exchange Coinbase.
Analysts said a number of factors seemed to have triggered the drop, including US President Joe Biden's capital gains tax plans; a sharp drop in mining rates around the world; a ban on cryptocurrency payments in Turkey; and volatility created by bitcoin futures.
However, many commentators have argued that the future looks bright. "If bitcoin continues to stay in the news and more people express interest in cryptos, retail demand should remain healthy," Edward Moya, senior market analyst at Oanda, said.
"Institutional flows still seem firmly committed with their longer-term bets."