In a significant achievement, Bitcoin breaks the $50,000 mark, as reported by Bloomberg. This marks a crucial milestone for the world’s largest cryptocurrency, last seen at this value over two years ago in December 2021.
The milestone signals a remarkable recovery for the crypto industry, which faced setbacks, including scandals and bankruptcies, raising doubts about the sustainability of digital assets.
Notably, Bitcoin has tripled in value since the beginning of last year, rebounding from a 64 percent decline in 2022. Despite this surge, the current price remains below the all-time high of nearly $69,000 recorded in November 2021.
Bitcoin’s recent rally is attributed to optimism following the United States’ regulatory approval of exchange-traded funds (ETFs) for direct Bitcoin ownership. Analysts believe this approval fosters increased mainstream acceptance, contributing to the surge in value.
“There is a lot of talk about the inflow of money into this asset. I’d also note that the momentum players are getting excited as well,” says Matt Maley, Chief Market Strategist at Miller Tabak & Co., as reported by Bloomberg.
Investor Confidence Grows as US Approval Nears
As Bitcoin broke the $50,000 mark on Tuesday for the first time in over two years, riding on increasing investor optimism regarding the potential approval of broader trading opportunities in the United States. The cryptocurrency has witnessed a robust performance in recent months, fueled by expectations that US lawmakers may greenlight the creation of exchange-traded funds (ETFs) tracking its price, allowing the public to invest in crypto without direct purchases.
Post-Green Light Rally
Despite an initial drop in response to last month’s approval by Washington, Bitcoin has rebounded by about 25 percent since January 22, reaching as high as $50,328, its peak since late 2021, according to Bloomberg data. Observers express positivity about the future, emphasizing the role of enthusiast buyers in propelling prices upward.
Fadi Aboualfa, from Copper Technologies, states, “Enthusiast buyers bring in more enthusiast buyers pushing prices further up. The cryptocurrency has momentum on the back of several green weeks and has a high chance of going up when markets see upward movements upwards of 10 percent (as we saw last week).”
Current Status and Historical Context
As of 0330 GMT Tuesday, Bitcoin slightly dipped to $49,950. While it remains below its record value of almost $69,000 in 2020, the recent rally marks a recovery after a series of high-profile scandals and collapses that shook the crypto industry. Notably, FTX, the world’s second-largest crypto exchange, faced a dramatic downfall last year, with its CEO Sam Bankman-Fried potentially facing up to 110 years in prison for what prosecutors labeled as “one of the biggest financial frauds in American history.” In November, Changpeng “CZ” Zhao stepped down as CEO of Binance, the world’s largest crypto exchange, following guilty pleas to sweeping money laundering violations.
Driving Forces Behind the Surge
Bitcoin’s upward trajectory has also been influenced by hopes that the US Federal Reserve will initiate interest rate cuts this year as inflation eases. The asset’s value is further propelled by expectations of a supply crunch next year due to the upcoming “halving” event. Bitcoin is mined as a reward when powerful computers solve complex problems, but the reward is halved every four years. The next “halving” is scheduled for May.
A Resilient Comeback
The news that Bitcoin breaks the $50,000 mark showcases its resilience and recovery from past setbacks. Optimism surrounding US regulatory approval, expectations of reduced interest rates, and the upcoming “halving” event contribute to the positive momentum. While the cryptocurrency remains below its historical peak, the current trajectory suggests a bullish outlook, with enthusiasts driving further price increases.
Also Read: Donald Trump’s Re-Election: Potential Impact on Bitcoin and Market Volatility.
