Picture: 123RF/MONSIT JANGARIYAWONG
Picture: 123RF/MONSIT JANGARIYAWONG

Bitcoin topped the closely watched $50,000 level again in an ongoing recovery in the cryptocurrency market from a disorderly rout just three months ago.

The largest virtual coin advanced as much as 4.2% to almost $50,440 in Asian trading on Monday, with other tokens including Ether and Cardano’s ADA also rising. Bitcoin was last above $50,000 in mid-May. 

The revival in virtual currencies has excited the animal spirits of the crypto faithful, putting predictions of $100,000 or more for bitcoin back in vogue. Others see the volatile asset carving out a wider trading range for now. 

“We’re seeing some very bullish signs here,” said Vijay Ayyar, head of Asia-Pacific with crypto exchange Luno in Singapore. Bitcoin could “test all-time highs again” after pushing past levels that some had seen as major challenges.

Bitcoin hit a record of almost $65,000 in April, driven by a tide of liquidity, fast-money bets and optimism about growing demand from institutional investors. Supportive views from billionaire Elon Musk and the direct listing of digital-currency platform Coinbase Global also fuelled optimism.

But more critical opinions later emerged, including an about-face from Musk, focused in part on the environmental cost of the energy consumed by the computers that underpin bitcoin. A cryptocurrency crackdown in China also soured the mood. Bitcoin tumbled below $30,000 after a crypto rout in May.

The recovery since then has seen the value of more than 9,000 digital tokens tracked by CoinGecko reach about $2.2-trillion from $1.2-trillion a month ago. 

Bulls have taken heart from more recent comments from Musk and Ark Investment Management’s Cathie Wood, as well as speculation over Amazon.com’s possible involvement in the cryptocurrency sector.

Musk said in July that he would like to see the token succeed and that he personally had bought bitcoin, ethereum and dogecoin. Ark’s Wood said corporations should consider adding bitcoin to their balance sheets.

The hash rate — a measure of the computational power being put towards the bitcoin network — has also rebounded from early-July lows, in a sign that the sector is adjusting after disruptions caused by China’s clampdown.

Bitcoin is “getting nearer the higher end of what I expect as a new trading range in the low-$40,000s to low-$50,000s,” Rick Bensignor, CEO at Bensignor Investment Strategies, wrote in a note Monday.

Outside the largest coin, second-ranked Ether has also been climbing, boosted by an upgrade to its underlying network that signals a more constrained supply of the token. The ADA coin linked to the Cardano blockchain has surged of late into third spot on technological enhancements that may make the network more useful. 

Bitcoin is up 73% so far in 2021, Ether 350% and ADA over 2,000%. The likes of dogecoin and solana have also contributed to the crypto rally.

Bloomberg News. More stories like this are available on bloomberg.com

subscribe

Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.