Bitcoin surged above $50,000 on Tuesday, marking its highest level in over two years, driven by investor optimism surrounding potential US approval for broader cryptocurrency trading. The anticipation of US lawmakers allowing the creation of exchange-traded funds (ETFs) tracking crypto prices has fueled Bitcoin’s recent strong performance. Despite initially dropping after receiving approval from Washington last month, Bitcoin has rallied approximately 25% since January 22, reaching as much as $50,328, its highest point since late 2021, according to Bloomberg data.
Observers express optimism about Bitcoin’s outlook, citing enthusiast buyers contributing to upward momentum. Fadi Aboualfa of Copper Technologies noted the cryptocurrency’s potential for further increases, particularly when weekly market movements exceed 10%, as seen in recent weeks.
As of 0330 GMT on Tuesday, Bitcoin slightly decreased to $49,950, remaining below its record value of nearly $69,000 in 2020. Nevertheless, this rally signifies a recovery from setbacks such as scandals and collapses that shook the cryptocurrency industry. Last year, FTX, the world’s second-largest crypto exchange, faced a dramatic collapse, and its CEO, Sam Bankman-Fried, is confronting potential legal repercussions for alleged financial fraud.
Furthermore, in November, Changpeng “CZ” Zhao resigned as CEO of Binance, the world’s largest crypto exchange, after pleading guilty to significant money laundering violations. Bitcoin’s positive momentum is further supported by expectations that the US Federal Reserve will reduce interest rates this year amid easing inflation concerns.
The cryptocurrency’s value is also influenced by the upcoming “halving” event, where the reward for mining new bitcoins is halved every four years. The next “halving” is scheduled for May, contributing to expectations of a supply crunch in the cryptocurrency market.
