Bitcoin gained ground while U.S. bond yields dropped during Wednesday's Asian session as remarks by U.S. Federal Reserve Chairman Jerome Powell squashed fears of an early unwinding of monetary stimulus.

The leading cryptocurrency clocked a high of $51,413 at 04:15 UTC, having defended the psychological support of $45,000 on Tuesday, according to CoinDesk 20 data. At press time, bitcoin traded near $50,500, representing a 3% gain on the day.

The U.S. 10-year bond yield slipped to 1.33%, extending Tuesday's drop from 1.39% to 1.34%, according to data source TradingView.

The yields came under pressure, possibly helping bitcoin scale the $50,000 mark, as Powell underscored the U.S. economy's ongoing weakness in written testimony to the U.S. Senate Banking Committee on Tuesday. Bond yields are reflective of investors' expectations of growth/inflation and interest rates.

"The economic recovery remains uneven and far from complete, and the path ahead is highly uncertain," Powell said, noting that millions of Americans are still out of work.

Powell's comments contradicted the bond markets' previous optimism that the U.S. economy would grow rapidly this year, putting pressure on the Fed to unwind stimulus (hike rates or scale back bond purchases) earlier than expected. The 10-year bond rose to a 12-month high of 1.39% earlier this week, diluting bitcoin's appeal as an inflation hedge, and sending the cryptocurrency lower to $45,000 from record highs above $58,000. The sell-off was accentuated by U.S. Treasury Secretary Janet Yellen's anti-bitcoin comments.

A continued decline in bond yields could propel bitcoin toward record highs. "The focus remains on bond yields and stock markets," Denis Vinokourov, head of research at the London-based prime brokerage Bequant, told CoinDesk in a Telegram chat.

Vinokourov added that "buying the dip" remains the best strategy, as institutional demand for the cryptocurrency continues to grow. Payments giant Square disclosed its additional bitcoin investment worth $170 million on Tuesday. Elsewhere, the recently launched Canadian bitcoin exchange-traded fund (ETF) is witnessing strong inflows, as noted by the data provider Glassnode.

Further, the settlement of a long-running legal dispute between Tether Ltd, the company behind the stablecoin tether, and the New York Attorney General's office has supposedly removed a potential systemic threat to cryptocurrency markets.

Analysts at JPMorgan warned last week that a sudden loss of confidence in tether posed risk to crypto markets, given the stablecoin is widely used to fund cryptocurrency purchases.