HONG KONG (BLOOMBERG) – Bitcoin surged back above $ 50,000 (S $ 66,000) on Wednesday (Feb. 24), helped by supportive comments from Cathie Wood of Ark Investment Management.
The largest cryptocurrency rose in Asian trading by 5.4 percent to around 50,557 US dollars. The rebound follows a tough week for the token, including a dip to $ 45,000 on Tuesday, which rekindled doubts about the durability of a staggering and volatile five-fold spike over the past year.
General investor sentiment was also bolstered by comments from Federal Reserve Chairman Jerome Powell on Tuesday, who signaled that the central bank is nowhere near able to lift its loose policy. Cryptocurrencies have been backed by a flurry of monetary and fiscal incentives to combat the effects of the pandemic.
Ms. Wood, the superstar boss at Ark, said in a Bloomberg interview that she was “very positive about Bitcoin, very happy to see a healthy correction here”.
Bitcoin remains lower than its recent record of about $ 58,350, but the pull-out so far has been “relatively modest,” wrote the Bespoke Investment Group in a blog post.
The cryptocurrency rally is at the center of one of the hottest debates in the financial markets. Believers see an emerging asset class that will be adopted by long-term investors, not just speculators. Critics fear that Bitcoin is in a bubble that will inevitably burst.
Tesla chief executive officer Elon Musk said in recent tweets bitcoin prices were “high” after previously calling a “less stupid” version of cash. Microsoft co-founder Bill Gates warned about how investors can get caught up in manias. Treasury Secretary Janet Yellen said Bitcoin was “an extremely inefficient way to conduct transactions”.
Meanwhile, the Bitfinex crypto exchange has completed an investigation with New York Attorney General Letitia James over allegations that it has hidden the loss of mixed client and corporate funds and lied about reserves. Some market participants said the agreement, which included fines totaling $ 18.5 million, lifted a cloud over the cryptocurrency market.
“By and large, it’s less than a traffic ticket,” said Antoni Trenchev, managing partner and co-founder of Nexo in London, a crypto lender. “I’m just excited that they’ll reveal more numbers so we can gauge them accurately and hopefully this will provide some convenience to market participants.”