- Bitcoin hit a new all-time high of over $ 41,000, as the cryptocurrency rally showed few signs of slowing down despite recent volatility.
- The bitcoin and cryptocurrency rally was driven by record sums of fiscal and monetary stimulus flooding markets with cash, as well as concerns about currencies and inflation.
- Critics are questioning whether the rally is sustainable and point to past crashes in Bitcoin like when it dropped from $ 19,000 to $ 4,000 between 2017 and 2019.
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Bitcoin It reached an all-time high of more than $ 41,000 on Friday morning, triggering a rapid recovery despite falling below $ 37,000 overnight.
The value of the cryptocurrency increased by as much as 10.4% to 41,793.73 USD Hacked $ 40K for the first time on Thursday.
Bitcoin’s value has more than doubled over the past month, and has risen more than 30% in 2021 so far. It’s now 400% higher than it was a year ago, according to Bitstamp, which has left critics questioning the rally’s sustainability.
The rally was driven by the huge sums of money that governments and central banks inject into economies amid the coronavirus crisis.
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Bitcoin rose and crashed before, dropping from over $ 19,000 in December 2017 to under $ 4,000 after just over a year.
But Her supporters But this time is different, referring to institutional and wealthy investors buying the currency. For them, the question is how high a currency can rise.
“Investors continue to jump in the cryptocurrency train, which appears to be gaining more attention now as the US economy prepares to provide more stimulus in [Joe] “Biden’s first 100 days,” said Edward Moya, chief market analyst at Oanda Forex.
“The bitcoin stimulus is not going to disappear anytime soon,” said Moya. “The high incidence of Coronavirus only means that governments and central banks will remain resolute with fiscal and monetary stimulus efforts.”
“The cryptocurrency has achieved a major milestone and surpassed the $ 40,000 level, making the $ 50,000 price as real as possible,” said Naeem Aslam, Senior Market Analyst at Avatrade.
Cryptocurrency competition Ethereum It rose 6.26% in the past 24 hours to $ 1,269.47 Friday morning, according to Coinbase data. It was just below a new high in three years which it reached yesterday.
Bitcoin’s massive rise and sharp drop of more than 5% to below $ 37,000 overnight sparked some commentators, as the cryptocurrency continues to sharply split opinion.
“This could be a huge pump ahead of the big sell-off in the coming days. The rally that we’ve seen is simply staggering,” said Neil Wilson, chief market analyst at Markets.com trading platform.
“I’ll be aware of the big crash, but bitcoin short selling has always been a painful business, like Tesla shorting.”
Bitcoin bears argue that the massive rally in an asset with no underlying economic factors supporting it is doomed to collapse, as it has in the past. They also cite government regulations as a risk.
However, Wall Street giant JP Morgan said earlier this week that the digital currency It can amount to $ 146,000 If investors start treating it as seriously as a safe haven asset, as they do with gold.