- Bitcoin hit a record high of more than $41,000, and despite the recent turmoil, the rebound in cryptocurrencies shows little sign of slowing down.
- The rise of Bitcoin and cryptocurrencies has been affected by a record number of fiscal and monetary stimulus policies flooding the cash market, as well as concerns about currency and inflation.
- Critics question whether this rebound is sustainable and point to Bitcoin̵
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Bitcoin hit a new all-time high on Friday morning, exceeding $41,000. Although it experienced an overnight drop below $37,000, it still achieved a rapid recovery.
The cryptocurrency has gained 10.75% in the past 24 hours, reaching $41,361 on the exchange Bitstamp on 06.15 Eastern Time, and hitting $40,000 for the first time on Thursday.
The price of Bitcoin has more than doubled in the past month, and so far it has risen by more than 30% by 2021. According to Bitstamp’s data, it is now 400% higher than a year ago, which has caused critics to question the sustainability of the rally.
During the coronavirus crisis, the government and central banks injected huge amounts of money into the economy, which fueled the rally.
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Bitcoin has soared and crashed before, from over $19,000 in December 2017 to less than $4,000 a year later.
But its supporters believe that this time is different, it points to institutional investors and the super-rich to buy the currency. For them, the question is how much the currency can appreciate.
“Investors continue to jump on the cryptocurrency train. As the U.S. economy is ready to provide more stimulus to the U.S., it now seems to be more and more interesting. [Joe] The first 100 days of Biden,” said Edward Moya, senior market analyst at Oanda Currency.
Moya said: “Bitcoin’s stimulus will not disappear anytime soon.” “The growing COVID infection only means that the government and central banks will continue to be proactive in fiscal and monetary stimulus measures.”
Naeem Aslam, chief market analyst at the trading platform Avatrade, said: “The cryptocurrency has reached an important milestone and broke the $40,000 level, which makes the $50,000 price a reality.”
According to Coinbase’s data, the rival cryptocurrency Ethereum has gained 6.26% in the past 24 hours to $1,269.47 on Friday morning. This is a slight decrease from the historical high reached yesterday.
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The soaring gains and Bitcoin’s plunge of more than 5% to below $37,000 shocked some critics overnight, while cryptocurrencies continue to cause intense disagreements.
Neil Wilson, chief market analyst at the trading platform Markets.com, said: “In the next few days, this could be a huge sell-off. Before that, the rebound we saw was simply surprising.
“I will notice a big crash, but shorting Bitcoin has always been a painful transaction, just like shorting Tesla.”
Bitcoin bears believe that the huge rebound in assets does not have the basic economic factors of the past and is doomed to collapse. They also classified government regulations as dangerous.
However, Wall Street giant JPMorgan said earlier this week that if investors start to treat gold as a safe-haven asset, the digital currency could reach $146,000.