Bitcoin back to $50,000 for the first time since late 2021
Bitcoin has reached a significant milestone, hovering around the $50,000 mark for the first time in over two years, showcasing a remarkable resurgence from the tumultuous periods of crypto scandals and setbacks that previously challenged the industry’s credibility.
This impressive climb follows its tripled value since the beginning of last year, despite experiencing a sharp 64% decline in 2022. However, Bitcoin still trails approximately $19,000 below its all-time high recorded in November 2021.
The inherent volatility of Bitcoin, a defining characteristic since its inception over a decade ago, has continued to attract speculators. Originally positioned as an alternative to traditional financial systems, the recent rally has been fuelled by optimism stemming from the US approval of spot Bitcoin exchange-traded funds last month, signalling broader mainstream acceptance.
Matt Maley, chief market strategist at Miller Tabak & Co., noted, “There is a lot of talk about inflow of money into this asset… momentum players are getting excited as well.”
This resurgence in crypto prices coincides with expectations of looser monetary policies, amplifying the appeal of riskier assets. Chris Newhouse, a DeFi analyst at Cumberland Labs, observed, “The appetite for risk has trickled over into digital assets as well.”
The positive sentiment extended to crypto-related stocks, with Bitcoin proxy MicroStrategy Inc. rising 11%, Coinbase Global Inc. increasing 3.8%, and miner Marathon Digital Holdings Inc. jumping 14.2% on Monday. Similarly, Asian stocks associated with digital assets experienced gains, including companies like Japan’s Monex Group and South Korea’s Woori Technology Investment Co.
Bitcoin has successfully recovered from the May 2022 implosion of stablecoin TerraUSD, which triggered a chain of failures culminating in the collapse of FTX exchange in November 2022. With notable figures like Sam Bankman-Fried and Changpeng Zhao facing legal issues, analysts perceive fewer imminent risks, contributing to the upward trajectory of crypto prices.