Bitcoin surpassed the $50,000 mark on Tuesday, marking its highest value in over two years.
Investor optimism surged as anticipation grew regarding broader trading approval in the US, with hopes riding high on potential green lights for cryptocurrency exchange-traded funds (ETFs).
Despite an initial dip following Washington’s approval signal last month, Bitcoin has rebounded impressively, boasting a 25 percent rally since January 22.
As of the latest data from Bloomberg, the cryptocurrency peaked at $50,328, underscoring the resilience and upward momentum in the crypto market, leaving observers optimistic about its future trajectory.
“Enthusiast buyers bring in more enthusiast buyers pushing prices further up,” Fadi Aboualfa, of Copper Technologies, said.
“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 percent (as we saw last week).”
By 0330 GMT Tuesday, bitcoin had dropped slightly, to $49,950.
While Bitcoin has made an impressive recovery, currently standing above $50,000, it still lags significantly behind its peak value of nearly $69,000 in 2020. This rally signals a bounce-back for the cryptocurrency, which faced turbulent times marked by high-profile scandals and collapses within the crypto industry.
Last year, FTX, the world’s second-largest crypto exchange, suffered a dramatic downfall, with its CEO, Sam Bankman-Fried, now confronting potential consequences. Prosecutors have characterised the situation as “one of the biggest financial frauds in American history,” and Bankman-Fried faces the looming threat of up to 110 years in prison.
In November, Changpeng “CZ” Zhao resigned as CEO of Binance, the world’s largest crypto exchange, following both his and the company’s admission of guilt in extensive money laundering violations.
Bitcoin’s upward trajectory is further fueled by optimism surrounding potential interest rate cuts by the US Federal Reserve this year, as inflation appears to be easing. The cryptocurrency’s value is also influenced by an anticipated supply crunch next year, attributed to the recurring event known as “halving.”
Bitcoin, earned through intricate problem-solving by powerful computers in a process called “mining,” experiences a reduction in reward every four years. With the next “halving” scheduled for April, the limited supply dynamic continues to be a driving force behind Bitcoin’s value surge.
