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Bitcoin surpasses $60,000 for 1st time in two years. Why is it rising?
Bitcoin rose as much as 5.12% to $63,649 by 9:30 am (local time) in New York.
Cryptocurrency Bitcoin on Thursday surpassed $60,000 for the first time in more than two years.
The jump comes amid surging optimism that demand for the token is widening beyond committed digital-asset enthusiasts, according to Bloomberg.
On Thursday, the token rose as much as 5.12% to $63,649 by 9:30 am (local time) in New York. Earlier, Bitcoin spiked to $63,968 on Wednesday but soon lost the gains to end at below $59,000.
Bitcoin had last traded at the $60,000 mark in November 2021, after reaching an all-time high of almost $69,000 earlier that same month.
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According to Bloomberg, Bitcoin has jumped over 40% already this year atop the successful debut of the US ETFs (Exchange-Traded Fund), which directly hold the token.
Why Bitcoin prices are rising?
According to Chris Newhouse, a DeFi analyst at Cumberland Labs, Bitcoin is approaching new yearly highs off the back of increased spot demand and momentum traders taking positions after a week of consolidation.
Besides this, a projected reduction in Bitcoin’s supply growth is also adding to the upbeat sentiment in the cryptocurrency market.
“Optimism around Bitcoin is being driven by a few factors working together: the spot BTC ETF inflows in the US, the upcoming reduction of new Bitcoin issuance known as the halving, and overall renewed optimism around the crypto asset class as a whole,” Jonathon Miller, managing director of the Kraken Australia digital-asset exchange, told Bloomberg.
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Zaheer Ebtikar, founder of crypto fund Split Capital, told the media outlet that more and more people are just convinced to buy. “We are starting to see a pretty clear FOMO kind of rally,” he said.
However, some experts have also warned of a sharp correction in the rally.
“This move has been very sharp, leverage is very high at the moment, as implied by derivatives basis and funding rates, so I would not be surprised by a sharp correction” of 20% or more, said Jaime Baeza, founder at crypto hedge fund AnB Investments. “Nonetheless, I would not be shorting into this rally while it continues to move at this pace.”
(Inputs from Bloomberg)
