Bitcoin surged above the $50,000 mark on Tuesday, marking its highest level in over two years, as investors expressed optimism about the potential for broader trading approval in the United States, anticipating increased demand for the cryptocurrency.
Bitcoin Gains Momentum
According to AFP, Bitcoin, in recent months, has experienced a notable upward trend, primarily driven by expectations that US regulators would approve the creation of exchange-traded funds (ETFs) designed to track its price.
Such approval would enable the public to invest in Bitcoin through these funds without directly purchasing it.
BANGKOK, THAILAND - MAY 14: A poster with the Bitcoin logo is on display at the Thailand Crypto Expo on May 14, 2022 in Bangkok, Thailand. Cryptocurrency Enthusiasts attend Thailand Crypto Expo 2022, the largest cryptocurrency exposition in Southeast Asia, at the Bangkok International Trade and Exhibition Center. Visitors learn about blockchain projects, exchanges, mining, NFT production, and gamefi technology. The exposition comes during a global market crash.
Despite initial fluctuations following last month's regulatory nod from Washington, Bitcoin has rallied approximately 25 percent since January 22, demonstrating resilience and investor confidence.
According to Bloomberg data, this surge propelled Bitcoin to reach a peak of $50,328, achieving its highest valuation since late 2021. Observers and analysts remain bullish about Bitcoin's future trajectory, attributing its momentum to enthusiast buyers who drive up demand, consequently increasing the prices.
Fadi Aboualfa, from Copper Technologies, told AFP that Bitcoin has seen several consecutive weeks of positive movement, indicating the potential for further upward momentum, especially in weeks where prices surge by more than 10 percent.
Bitcoin Is Still Below its 2020 Level
While Bitcoin's current valuation remains below its all-time high of nearly $69,000 in 2020, its recent rally signifies a robust recovery following several setbacks and controversies within the crypto realm.
Incidents such as the collapse of FTX, one of the world's largest crypto exchanges, and the legal challenges faced by its co-founder and former CEO, Sam Bankman-Fried, have highlighted the risks and challenges inherent in the crypto market.
Similarly, Binance, the world's leading crypto exchange, faced scrutiny and legal action for alleged money laundering violations, prompting its CEO Changpeng "CZ" Zhao to step down.
These high-profile scandals have underscored the importance of regulatory oversight and compliance in the cryptocurrency sector.
Read Also: CryptoWatch: Bitcoin Mining's US Energy Consumption, FTX Wants to Repay Customers, Top Coin Prices
The 'Halving' Event
Bitcoin's upward trajectory has also been boosted by expectations of potential interest rate cuts by the US Federal Reserve amid easing inflationary pressures. Additionally, the anticipation of a supply crunch next year, resulting from the scheduled "halving" event, has further fueled investor interest in Bitcoin.
The "halving" event, which occurs approximately every four years, involves a reduction in the reward for Bitcoin mining, thereby limiting the cryptocurrency's supply.
Overall, Bitcoin's resurgence above $50,000 reflects renewed optimism and confidence in the cryptocurrency, fueled by regulatory developments, market dynamics, and broader economic factors.
Related Article: Bitcoin Mining Takes 2% of US Electricity, Estimates 25 to 91 Terawatt-hours Consumption
