March 5, 2024

Bitcoin soars to cross $50,000 mark for 1st time since 2021

Crypto heavyweight Bitcoin crossed the $50,000 mark late Monday for the first time in over two years as investors remain optimistic that U.S. approval of broader trading in the unit would push demand up.

The cryptocurrency has enjoyed a strong run in recent months, fuelled by expectations U.S. 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% since Jan. 22.

According to Bloomberg data, that advance saw the world’s largest cryptocurrency hit as much as $50,328, 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 10% (as we saw last week).”

By 3:30 a.m. GMT Tuesday, Bitcoin had dropped slightly to $49,950.

The currency remains well below its record value of almost $69,000 in 2020. Still, 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 U.S. Federal Reserve (Fed) 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 the reward is halved every four years. The next “halving” is due in May.

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