Bitcoin breaks $50,000 for first time since 2021 — Business

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Bit­coin spiked above $50,000 on Tues­day for the first time in more than two years as investors grow opti­mistic that US approval of broad­er trad­ing in the unit will ramp up demand.

The cryp­tocur­ren­cy has enjoyed a strong run in recent months, fuelled by expec­ta­tions US law­mak­ers would allow the cre­ation of exchange-trad­ed funds (ETFs) that track the price and let the pub­lic invest in cryp­to with­out direct­ly pur­chas­ing it.

After ini­tial­ly drop­ping in reac­tion to last month’s green light by Wash­ing­ton, bit­coin has ral­lied about 25 per cent since Jan­u­ary 22.

That advance saw it hit as much as $50,328, accord­ing to Bloomberg data, its high­est lev­el since late 2021.

And observers were opti­mistic about the outlook.

“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 10pc [as we saw last week].”

By 3:30am GMT on Tues­day, bit­coin had dropped slight­ly, to $49,950.

The cur­ren­cy remains well below its record val­ue of almost $69,000 in 2020, but the ral­ly marks a recov­ery fol­low­ing a series of high-pro­file scan­dals and col­laps­es that rocked the cryp­to industry.

FTX, the world’s sec­ond-biggest cryp­to exchange, dra­mat­i­cal­ly went under last year, and its boss Sam Bankman-Fried faces up to 110 years in prison for what pros­e­cu­tors described as “one of the biggest finan­cial frauds in Amer­i­can history”.

And in Novem­ber, Chang­peng “CZ” Zhao stepped down as CEO of Binance — the world’s biggest cryp­to exchange — after he and the com­pa­ny plead­ed guilty to sweep­ing mon­ey laun­der­ing violations.

Bit­coin has also been boost­ed by hopes that the US Fed­er­al Reserve will start to cut inter­est rates this year as infla­tion eases.

The asset’s val­ue has been dri­ven by the sup­ply crunch expect­ed next year because of an event called “halv­ing”.

Bit­coin is cre­at­ed — or “mined” — as a reward when pow­er­ful com­put­ers solve com­plex problems.

But the amount of bit­coin is lim­it­ed and every four years, the reward is halved. The next “halv­ing” is due in May.

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