Bitcoin hits US$50 000 for first time since 2021
Appetite for risk
The wild price fluctuations seen since the introduction of Bitcoin more than a decade ago have long been one of the main attractions to speculators.
Bitcoin yesterday jumped to US$50 000 for the first time in more than two years, staging a remarkable comeback from a series of crypto industry scandals and bankruptcies that had raised questions about the viability of digital assets. The original cryptocurrency has tripled in value since the start of last year, climbing back from a 64% plunge in 2022. Bitcoin last traded at US$50 000 in December 2021.
The price is still below the all-time high of almost US$69 000 reached in November 2021.
The wild price fluctuations seen since the introduction of Bitcoin more than a decade ago have long been one of the main attractions to speculators.
While originally promoted as an alternative to the traditional financial system, the latest rally has been driven by optimism that last month’s US approval of exchange-traded funds to own Bitcoin directly is leading to greater mainstream acceptance.
Momentum
“There is a lot of talk about inflow of money into this asset,” said Matt Maley, chief market strategist at Miller Tabak & Co. “I’d also note that the momentum players are getting excited as well.”
The resurgence in crypto prices comes as investors in the broader finance markets re-embrace risk amid expectations that the Federal Reserve is moving closer to easing monetary policy. Higher interest rates tend to dull the allure or risker assets such as crypto.
“The appetite for risk has trickled over into digital assets as well,” said Chris Newhouse, a DeFi analyst at Cumberland Labs.
Bitcoin has recovered all its losses since the May 2022 implosion of stablecoin TerraUSD, which set in motion the wave of failures that ultimately helped bring down Sam Bankman-Fried’s FTX exchange in November 2022. - Fin24/Bloomberg