Bitcoin surged above $50,000 on Tuesday for the first time in more than two years, as investors believe that US permission of broader trade in the currency will boost demand.
The cryptocurrency has experienced a surge in recent months, fueled by predictions that US lawmakers will authorize the development of exchange-traded funds (ETFs) that follow the market and allow the general public to invest in bitcoin without physically acquiring it.
After initially falling in response to Washington’s green light last month, bitcoin has risen by around 25% since January 22.
According to Bloomberg statistics, it advanced to as much as $50,328, its highest level since late 2021.
And onlookers were positive about the situation.
“Enthusiast buyers attract more enthusiast buyers, pushing prices even higher,” Copper Technologies’ Fadi Aboualfa 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 fallen marginally to $49,950.
The currency remains significantly below its all-time high of about $69,000 in 2020, but the gain represents a rebound after a series of high-profile scandals and failures that rocked the crypto industry.
FTX, the world’s second-largest cryptocurrency exchange, collapsed last year, and its CEO, Sam Bankman-Fried, faces up to 110 years in jail for what authorities called “one of the biggest financial frauds in American history.”
In November, Changpeng “CZ” Zhao resigned as CEO of Binance, the world’s largest cryptocurrency exchange, after pleading guilty to widespread money laundering charges.
Bitcoin has also been supported by expectations that the US Federal Reserve would begin to lower interest rates this year as inflation falls.
The asset’s value has been pushed by the supply crunch that is projected next year as a result of an event known as “halving”.
Bitcoin is generated — or “mined” — as a reward for powerful computers that solve complex problems.
However, the number of bitcoins is restricted, and the incentive is halved every four years. The next “halving” is due in April.