Bitcoin hits US$50K for 1st time since 2021. What’s behind the surge
globalnews.caBitcoin BTC= hit the $50,000 level for the first time in more than two years as the world’s largest cryptocurrency was buoyed by expectations of interest rate cuts later this year and last month’s regulatory nod for U.S. exchange-traded funds designed to track its price.
The cryptocurrency has risen 16.3 per cent so far this year, on Monday touching its highest since Dec. 27, 2021. At 12:56 p.m. EST (1756 GMT), bitcoin was up 4.96 per cent on the day at $49,899, having oscillated around the $50,000 level.
“$50,000 is a significant milestone for bitcoin after the launch of spot ETFs last month not only failed to elicit a move above this key psychological level but led to a 20 per cent sell-off,” said Antoni Trenchev, co-founder of crypto lending platform Nexo.
Crypto stocks also enjoyed a boost on Monday, with crypto exchange Coinbase COIN.O up 4.9 per cent and crypto miners Riot Platforms RIOT.O and Marathon Digital MARA.O up 10.8 per cent and 11.9 per cent, respectively. Shares of software firm MicroStrategy MSTR.O — a notable buyer of bitcoin — were up 10.2 per cent.
The price of ether, the second-largest cryptocurrency, was up 4.12 per cent at $2,607.57.
Global stock indexes also edged higher on Monday, as traders looked for cues on when the U.S. Federal Reserve might begin cutting interest rates. Analysts and financial market expectations both point to May as a potential start for rate cuts this year.
The primary driver behind bitcoin’s recent price appreciation “can be attributed to the increased inflow into BTC spot ETFs,” said Matteo Greco, a research analyst at fintech investment firm Fineqia International, in a research note.
The U.S. securities regulator on Jan. 10 approved the first U.S. spot bitcoin ETFs, a
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