Bitcoin exploded past the $50,000 threshold for the first time in more than two years on Monday – the latest sign of a massive rebound for the scandal-rocked crypto sector.
The pricey cryptocurrency rose nearly 5% in Monday afternoon trading and hovered right at the $50,000 level after earlier surging past the milestone. Bitcoin is up more than 16% since the start of the year.
Crypto fanatics were bolstered by expectations that the Federal Reserve will soon loosen market conditions by cutting interest rates. The market projects that the Fed’s first rate cut in years could occur as soon as May.
The SEC’s approval last month of spot bitcoin ETFs – which allow investors to acquire stakes in funds that own bitcoin – also appears to be stoking renewed optimism among investors.
“There is a lot of talk about inflow of money into this asset,” Matt Maley, chief market strategist at Miller Tabak & Co, told Bloomberg. “I’d also note that the momentum players are getting excited as well.”
Bitcoin went through a major slump shortly after hitting its all-time high price of $69,000 in November 2021. The leading crypto token hadn’t traded above $50,000 since December of the year.
The industry was rocked by a so-called “crypto winter” in 2022, with bitcoin dropping by a whopping 64% as a rise in interest rates led some investors to dump their crypto holdings in favor of less risky options.
The trouble was compounded by stunning implosions of the TerraUSD stablecoin and its interlinked sister cryptocurrency Luna.
The most significant blow came in November 2022 with the collapse of convicted fraudster Sam Bankman-Fried’s FTX empire. Bankman-Fried is awaiting sentencing after being late last year of stealing $10 billion from his customers.
Traders have regained their appetite for the risky assets despite warnings from SEC Chairman Gary Gensler, who has remained critical of cryptocurrencies as an investment vehicle despite his agency’s approval of the spot ETFs.
“Investors should be aware that the underlying asset is a highly speculative, volatile asset,” Gensler told CNBC last month. “Amongst its use cases is really for illicit activity – money laundering and sanctions and ransomware and the like.”
With Post wires