Bitcoin reached $50,000 for the first time in more than two years, boosted by predictions of interest rate reduction later this year and last month’s regulatory approval for U.S. exchange-traded funds, meant to follow its price.
So far this year, the cryptocurrency has increased by 16.3%, reaching its highest level on Monday since December 27, 2021. At 11:31 a.m. EST (1731 GMT), Bitcoin was worth $50,196, up 5.58% on the day.
“$50,000 is a significant milestone for bitcoin after the launch of spot ETFs last month not only failed to elicit a move above this key psychological level but also resulted in a 20% sell-off,” said Antoni Trenchev, co-founder of cryptocurrency lending platform Nexo.
Bitcoin Rallies yet below 2020 record
The cryptocurrency has experienced a great run in recent months, fueled by predictions that US lawmakers will authorize the development of exchange-traded funds that follow the price and allow the general public to participate in crypto without physically acquiring it.
Bitcoin has rebounded approximately 25% since January 22, after initially plunging in response to Washington’s green light last month. That increase saw it reach as high as $50,328, its highest level since late 2021.
“Enthusiast buyers attract more enthusiast buyers, driving prices higher,” Copper Technologies’ Fadi Aboualfa told AFP.
“The cryptocurrency has momentum on the back of several green weeks and has a large chance of going up further when markets see weekly movements upwards of 10% (as we saw last week)”, he added.
The currency remains significantly below its all-time high of about $69,000 in 2020, but the gain represents a rebound after a series of high-profile scandals and failures that rocked the crypto sector.
A Day of Hiked Prices in Crypto
Crypto stocks also rose on Monday, with crypto exchange Coinbase up 4.9% and crypto miners Riot Platforms and Marathon Digital up 10.8% and 11.9%, respectively. MicroStrategy, a big Bitcoin buyer, saw its shares rise by 10.2 percent.
The price of Ether, the second-largest cryptocurrency, also rose by 4.12% to US$2,607.57.
Global market indices also moved up on Monday, as traders waited for clues on when the US Federal Reserve could start decreasing interest rates. Analysts and financial market forecasts also point to May as a possible start date for rate decreases this year.
Rallies follows the Crisis in the Crypto World
The Monday surge in prices comes after FTX, the world’s second-largest cryptocurrency exchange, collapsed last year, and its CEO, Sam Bankman-Fried, faces up to 110 years in jail for what authorities called “one of the biggest financial frauds in American history.”
In November, Changpeng “CZ” Zhao resigned as CEO of Binance, the world’s largest cryptocurrency exchange, after pleading guilty to numerous money laundering charges.
The asset’s value has been pushed by the supply crisis that is projected next year as a result of an occurrence known as “halving”. Bitcoin is generated — or “mined” — as a reward for powerful computers that solve challenging puzzles. However, the number of bitcoins is restricted, and the incentive is half every four years. The next “halving” is coming in May.
Nonetheless, the recent rally gives the investors more confidence in the crpto world.
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