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Bitcoin hovered around $50,000 after scaling the closely watched level for the first time in over two years, a remarkable comeback from the crypto scandals and wipeouts that had cast doubt on the industry’s viability.
The largest digital asset was trading at $50,100 as of 6:16 a.m. Tuesday in London having earlier risen as high as $50,379. The token has tripled in value since the start of last year following a 64% plunge in 2022. Bitcoin remains roughly $19,000 below the all-time high achieved in November 2021.
The wild price fluctuations seen since the introduction of Bitcoin more than a decade ago have long been one of the main attractions to speculators.
While originally promoted as an alternative to the traditional financial system, the latest rally has been driven by optimism that last month’s US approval of spot Bitcoin exchange-traded funds is leading to greater mainstream acceptance.
Bitcoin has recovered all its losses since the May 2022 implosion of stablecoin TerraUSD, which set in motion a wave of failures that ultimately helped bring down Sam Bankman-Fried’s FTX exchange in November 2022.
By the time FTX went down, the crypto market was already months into a rout that also claimed hedge fund Three Arrows Capital and lender Celsius Network.
But the fall of FTX, once one of the top crypto exchanges by trading volume, was even more damaging, with token prices stagnating as liquidity dried up.
Nine US spot Bitcoin exchange-traded funds debuted on Jan. 11, while the more than decade-old Grayscale Bitcoin Trust converted into an ETF the same day.
The accessibility of ETFs promises to widen the investor base for the token. The new funds have attracted in excess of $9 billion so far, while a more than $6 billion outflow from the Grayscale fund since its conversion appears to be losing steam.
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