For the first time in over two years, Bitcoin surged past $50,000 on Tuesday, as investors became increasingly confident that further US legalization of the cryptocurrency would increase demand, reports AFP.
Expectations that US lawmakers would approve the establishment of exchange-traded funds (ETFs) that follow the price of cryptocurrencies and allow the general public to invest in them without having to buy them directly have contributed to the recent surge in the price of cryptocurrencies.
After initially dropping in reaction to last month`s green light by Washington, bitcoin has rallied about 25 percent since January 22.
That advance saw it hit as much as $50,328, according to Bloomberg data, its highest level since late 2021.
And observers were optimistic about the outlook.
"Enthusiast buyers bring in more enthusiast buyers pushing prices further up," Fadi Aboualfa, of Copper Technologies, said.
"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 percent (as we saw last week)."
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.
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 expectation that the US Federal Reserve will begin to reduce interest rates this year as inflation starts to decline has also helped bitcoin.
The "halving" occurrence, which is predicted to generate a shortage of supplies next year, has drove up the asset`s worth.
Bitcoin is produced, or "mined," as a prize for utilizing powerful computers to resolve challenging issues.
However, the quantity of bitcoin is restricted, and the payout is cut in half every four years. May is when the next "halving" is scheduled.
