Bitcoin breaks back above US$50,000 in widespread crypto rally

Bitcoin broached the US$50,000 level once again as the wider cryptocurrency market continued its rally.

The largest cryptocurrency rose as high as US$50,374 on Thursday, having briefly surpassed US$50,000 on Aug. 23 as well — a level it hadn’t hit since mid-may. Ether, the second-largest crypto, rose as much as three per cent to US$3,843, continuing a strong run after its London upgrade early last month.

Other coins also gained, with the overall crypto market cap jumping five per cent to US$2.3 trillion, according to Coingecko.com pricing. No. 3 crypto Cardano is nearing a Us$100-billion market value amid optimism about smart contracts, and Solana and Polkadot are up about 60 per cent and 22 per cent, respectively, in the past seven days, Coingecko showed.

“Two fundamental factors that are likely behind Bitcoin’s push: Twitter’s potential integration of the coin as a Tip Jar payment option, and the official launch of Bitcoin as a legal tender in El Salvador come Sept. 7,” Petr Kozyakov, cofounder and chief executive of global-payment network Mercuryo, said in an email. “While we are expecting the US$50,000 price point to hold, Bitcoin buyers are exercising more optimism for even a bigger price gain by year-end.”

Cryptocurrencies have surged this year amid increased institutional interest and acceleration of development in areas like decentralized finance (Defi) and non-fungible tokens (NFTS). In addition, Twitter Inc. may be laying the groundwork to allow for Bitcoin tips in its Tip Jar feature, according to a recent report from Macrumors. Meanwhile, El Salvador’s Bitcoin law takes effect Sept. 7.

To be sure, not everyone sees the moves in altcoins as entirely beneficial.

“The previous phase of retail investors’ ‘mania’ into cryptocurrency markets was between the beginning of January and mid-may when the share of altcoins had risen from 13 per cent to 37.6 per cent,” said Jpmorgan Chase & Co. strategist Nikolaos Panigirtzoglou in a note Wednesday.

“While far from the record high of 55 per cent seen in January 2018, at 32.6 per cent the share of altcoins looks rather elevated by historical standards and in our opinion it is more likely to be a reflection of froth and retail investor ‘mania’ rather than a reflection of a structural uptrend.”