Bitcoin’s roller coaster ride continued on Monday as it broke through the $ 50,000 mark, breaking a multi-month depression and hinting at further gains.
Virtual currency jumped 3.8% to $ 50,341, rebounding to its highest value since May and nearly doubling its low of $ 27,700 in January.
The bump could be a preemptive rally ahead of the Federal Reserve’s next annual economic symposium in Jackson Hole, Wyoming, some analysts say.
“After Jackson Hole, the dollar could experience some depreciation, and institutions missing out on [bitcoin] over the past two weeks and slowly returning to work for the start of September, this will trigger further inflows into cryptocurrency and also equity, ”Laurent Kssis, managing director of exchange traded products at 21Shares.
It’s been a mad rush for Bitcoin, which topped $ 50,000 on Monday, down from $ 30,000 in May.
Bitcoin hit its annual low on January 4, when its value fell to $ 27,734
It’s been a mad rush for Bitcoin, which peaked at $ 64,829 in April, only to crash to around $ 30,000 the following month. It hit its lowest price of the year, $ 27,734, on Jan.4.
More recently, some investors have said the prospect of increased stimulus spending in the United States will lead to further gains, and more traditional financial services firms have taken action in the nascent asset class.
Meanwhile, the price of rival cryptocurrency ether rose 2.8% to $ 3,337. The virtual coin has risen 91% since it fell below $ 1,740 last month.
Tesla founder Elon Musk – one of the richest and most influential people on the planet with a Twitter account of over 50 million people – has sometimes influenced the cryptocurrency market with just one tweet.
Tesla founder Elon Musk appears to have the power to manipulate Bitcoin values with just one tweet.
When the visionary billionaire slammed the cryptocurrency earlier this year, its value almost instantly plummeted
But when Musk said Tesla would resume accepting Bitcoin as a payment method in June, its value rose.
When he tweeted in May that Tesla would no longer accept Bitcoin as a payment method due to environmental concerns, its value dropped 15% within minutes.
“Cryptocurrency is a good idea on many levels and we think it has a bright future, but it can’t come at a cost to the environment,” Musk tweeted at the time. “Tesla will not sell any bitcoin and we intend to use it for transactions as soon as mining shifts to more sustainable energy.”
Some bitcoin hosting providers have started using stranded or flared gas – which otherwise would have gone wasted – to fuel the energy-intensive bitcoin mining process.
Bitcoin’s rise follows a year of highs and lows for the cryptocurrency, which hit a three-month high in May
Conversely, when Musk tweeted in June that Tesla would resume authorization of Bitcoin transactions, the digital currency surged 9.8% to $ 39,035.
The cryptocurrency recovery comes as some more established financial services companies offer their customers access to virtual coins. PayPal Holdings Inc said on Monday that it would allow UK customers to buy, sell and hold bitcoin and other cryptocurrencies starting this week.
Some traders believe the bitcoin market has yet to see the full return of retail investors, suggesting that the current recovery may still have a way to go.
Robinhood, a free trading platform that recently went public, is among the companies that have capitalized on the growing popularity of cryptocurrencies such as Bitcoin.
“The last time bitcoin was at $ 50,000, Google’s trends (tracking website showing searches for Bitcoin) were much higher than they are now,” said Marcus Sotiriou, a trader for the broker. of UK-based digital assets GlobalBlock, in a note.
“This suggests that the euphoria of retail has not yet entered the market and that bitcoin still has a long way to go in this market cycle.”
Investors aren’t the only ones benefiting from the cryptocurrency resurgence.
When Robinhood first released its quarterly results as a state-owned company last Wednesday, it said cryptocurrency accounted for over 50% of transaction-based revenue, a 17% increase from one quarter. to the other.
The company, a commission-free trading and investing platform, allows users to trade multiple currencies, including Bitcoin.
Not everyone is a Bitcoin fan, with critics including business mogul Warren Buffet
Of course, Bitcoin has its detractors as well, including Warren Buffett, who said the cryptocurrency has no real value.
“Probably rat poison squared,” the business mogul told Fox Business in 2018.
Not everyone shares Buffett’s pessimism.
Investment strategist Lyn Alden predicted in 2016 that bitcoin would eventually hit $ 100,000.
“I think we’re still in the early to middle stage of its long-term trajectory,” Alden told Insider. “So that’s still, I think, the best risk / reward as a sort of allocation to set and forget.”
Some say the value of the cryptocurrency could soon double to $ 100,000
Bloomberg Intelligence’s Mike McGlone most recently echoed the sentiment in a TV interview last week.
“There is still a lot of room to reach the old peak,” McGlone said in a TV interview, adding that if the rise of another cryptocurrency is any indication, its value will likely skyrocket.
‘And guess what? If it just follows Ethereum, it drops to $ 100,000.