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Bitcoin breaks back above $50 000 in crypto rally

The largest cryptocurrency rose as high as $50 362 on Thursday.
Image: Bloomberg

Bitcoin broached the $50 000 level once again as the wider cryptocurrency market continued its rally.

The largest cryptocurrency rose as high as $50 362 on Thursday, having briefly surpassed $50 000 on August 23 as well — a level it hadn’t hit since mid-May. Ether, the second-largest crypto, rose as much as 3% to $3 843, continuing a strong run after its London upgrade early last month.

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Other coins also gained, with the overall crypto market cap jumping 5% to $2.3 trillion, according to CoinGecko.com pricing. Number-three crypto Cardano is nearing a $100 billion market value amid optimism about smart contracts, and Solana and Polkadot are up about 60% and 22%, respectively, in the past seven days, CoinGecko showed.

“Two fundamental factors that are likely behind Bitcoin’s push: Twitter’s potential integration of the coin as a Tip Jar payment option, and the official launch of Bitcoin as a legal tender in El Salvador come September 7,” Petr Kozyakov, co-founder and chief executive officer of global-payment network Mercuryo, said in an email. “While we are expecting the $50 000 price point to hold, Bitcoin buyers are exercising more optimism for even a bigger price gain by year-end.”

Cryptocurrencies have surged this year amid increased institutional interest and acceleration of development in areas like decentralised finance (DeFi) and non-fungible tokens (NFTs). In addition, Twitter Inc. may be laying the groundwork to allow for Bitcoin tips in its Tip Jar feature, according to a recent report from MacRumors. Meanwhile, El Salvador’s Bitcoin law takes effect September 7.

To be sure, not everyone sees the moves in altcoins as entirely beneficial.

“The previous phase of retail investors’ ‘mania’ into cryptocurrency markets was between the beginning of January and mid-May when the share of altcoins had risen from 13% to 37.6%,” said JPMorgan Chase & Co. strategist Nikolaos Panigirtzoglou in a note Wednesday. “While far from the record high of 55% seen in January 2018, at 32.6% the share of altcoins looks rather elevated by historical standards and in our opinion it is more likely to be a reflection of froth and retail investor ‘mania’ rather than a reflection of a structural uptrend.”

© 2021 Bloomberg

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