Bitcoin has reached $50,000 for the first time since December 2021, riding a broader rally in US stocks. The world’s largest cryptocurrency gained almost 5% on Monday to hit one-month highs. Other cryptocurrencies like Ethereum saw similar gains.
Analysts point to several reasons for the recent crypto surge, including growing expectations that central banks will cut interest rates soon. The prospect of cheaper borrowing has helped push the S&P 500 and Dow to record intraday highs. The Nasdaq narrowly missed breaking its record.
Bitcoin’s recovery from scandals like the FTX bankruptcy was aided last month when US regulators approved the creation of 11 Bitcoin exchange-traded funds (ETFs). These products allow investors to gain Bitcoin exposure without directly owning the currency. The SEC’s decision lent cryptocurrencies some legitimacy, despite ongoing skepticism about oversight.
After Bitcoin ETFs saw net outflows earlier this month, the tide turned on Friday with net inflows reported. This news helped Bitcoin gain over 10% year-to-date, topping $50,196 on Monday. The all-time high above $65,000 was in November 2021.
Analysts say Bitcoin has also rallied ahead of its next “halving” in April, which slows the release of new Bitcoins over time. Bitcoin rallied during the three previous halvings, most recently in 2020.
As eToro’s Ben Laidler said, the upcoming Bitcoin halving, potential Fed rate cut, and possible Ethereum spot ETF approval are all meaningful developments for the young, retail-driven crypto asset class.
