Bitcoin Breaks $50,000 Mark But Relapse as Ethereum Rises
Bitcoin’s price surged past $50,000 on Monday for the first time after cryptocurrencies crash in the second quarter, driven by the crackdown in China.
The world’s largest cryptocurrency was last up 1.19% at $49,888. It had risen as high as $50,562 as investors bet that the prospect of more U.S. stimulus spending would lead to further gains, and more mainstream financial services firms made moves in the nascent asset class.
Bitcoin has risen 82% since hitting a yearly low of $27,700 in January. Meanwhile, the price of rival cryptocurrency Ethereum rose 2.71% to $3,329. The virtual coin has risen 91% since slumping to below $1,740 last month.
The cryptocurrency recovery comes as some more established financial services companies offer their customers access to virtual coins. PayPal Holdings Inc. said on Monday it would allow customers in Britain to buy, sell and hold bitcoin and other cryptocurrencies starting this week.
Edward Moya, a senior market analyst at OANDA in New York, said the late-morning price dip below $50,000 seemed to be profit-taking. He pointed out that fears of capital gains taxation have led some traders to hold cryptocurrency as a long-term investment, removing some volatility from the market.
“New investors are the key to this latest bitcoin rally and all signs show they are comfortable with high risk,” he said in an email, adding that bitcoin “could see a fast appreciation here and might not hesitate to make a run for $60,000 if the appetite for risky assets remains intact.”
Others also believe the upswing could have further to go if more retail investors’ return to the market.
“The last time bitcoin was at $50,000, the Google trends (tracking website showing bitcoin searches) was much higher than what it is now,” Marcus Sotiriou, a sales trader at the UK based digital asset broker GlobalBlock, said in a note.
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“This suggests that retail euphoria hasn’t entered the market yet and bitcoin has a long way to go in this market cycle.”
The market turned a corner on July 21, with Bitcoin soaring under 70% since then, tackling milestones along with other top cryptocurrencies like Cardano and Solana.
Metrics suggest that a supply squeeze could be on the way, with long term retail and institutional investors having topped up their stash while prices were slashed.
The digital currency had been trading quite determinedly between $45k and $48k for a while now, and analysts think that pushing past $50,000 will take the coin on a bull run.
Bitcoin Breaks $50,000 Mark But Relapse as Ethereum Rises
