Bitcoin breaches $50K level for first time in over 2 years

Bitcoin breached $50,000 mark for the first time on Monday since 2021. This as investors grow optimistic that US approval of broader trading in the unit will ramp up demand and expectations of interest rate cuts by the Fed later this year.

Bitcoin Rallies

Fuelled by expectations that the US lawmakers would allow the creation of exchange-traded funds that track the price and let the public invest in crypto without directly purchasing it, the cryptocurrency has enjoyed a strong run in recent months.

After initially dropping in reaction to last month's green light by Washington, bitcoin has rallied about 25% since January 22. That advance saw it hit as much as $50,328, according to Bloomberg data, its highest level since late 2021.

Also Read: Bitcoin surges to $35,000, reaching a 1.5-year high on the back of ETF expectation

And observers were optimistic about the outlook.

"Enthusiast buyers bring in more enthusiast buyers pushing prices further up," Fadi Aboualfa, of Copper Technologies, told AFP. "The cryptocurrency has momentum on the back of several green weeks and has a large chance of going up further when markets see weekly movements upwards of 10% (as we saw last week)", he added

By 0330 GMT Tuesday, bitcoin had dropped slightly, to $49,950.

The currency remains well below its record value of almost $69,000 in 2020, but the rally marks a recovery following a series of high-profile scandals and collapses that rocked the crypto industry.

Crisis in Crypto world

FTX, the world's second-biggest crypto exchange, dramatically went under last year, and its boss Sam Bankman-Fried faces up to 110 years in prison for what prosecutors described as "one of the biggest financial frauds in American history".

And in November, Changpeng "CZ" Zhao stepped down as CEO of Binance -- the world's biggest crypto exchange -- after he and the company pleaded guilty to sweeping money laundering violations.

The asset's value has been driven by the supply crunch expected next year because of an event called "halving". Bitcoin is created -- or "mined" -- as a reward when powerful computers solve complex problems. But the amount of bitcoin is limited and every four years, the reward is halved. The next "halving" is due in May.