Bitcoin breaks $50,000 for first time since 2021

NEW YORK

Bitcoin spiked above $50,000 yesterday for the first time in more than two years as investors grow optimistic that U.S. approval of broader trading in the unit will ramp up demand.

The cryptocurrency has enjoyed a strong run in recent months, fuelled by expectations U.S. lawmakers would allow the creation of exchange-traded funds (ETFs) that track the price and let the public invest in crypto without directly purchasing it.

After initially dropping in reaction to last month's green light by Washington, bitcoin has rallied about 25 percent since Jan. 22.

That advance saw it hit as much as $50,328, 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]."

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.

And in November, Changpeng 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.

Bitcoin has also been boosted by hopes that the U.S. Federal Reserve will start to cut interest rates this year as inflation eases.