Bitcoin passes $45,000 for 21-month high

BITCOIN has stormed above $45,000 (£35,300) for the first time since April 2022 amid hopes that American regulators will relax trading rules around the world’s largest cryptocurrency.

Investors are backing Bitcoin as expectations grow that the US Securities and Exchange Commission will soon approve exchange-traded spot funds for the currency.

Exchange-traded funds, known as ETFS, are funds that track a specific index or asset. They are attractive to investors as it allows them to speculate on movements in the price of a group of stocks, commodities or bonds without owning the asset in question.

Hayden Hughes, co-founder of social-trading platform Alpha Impact, said much of the rise in the price of Bitcoin was down to the fear of missing out, with investors “buying on January 1, first thing New Year’s morning”.

Bitcoin rebounded by nearly 160pc last year following the 2022 crash that reverberated around the crypto industry. Confidence in the currency was rocked by the collapse of FTX, which led to founder Sam Bankman-fried being jailed for fraud. Rival crypto platform Binance was also hit by the departure of chief executive Changpeng “CZ” Zhao as part of a settlement with US authorities for violating international anti-money laundering provisions.

Despite these setbacks, Bitcoin outperformed global stocks and gold in 2023. However, it remains below the record-high of $68,789.63 set in 2021.

Longer term, it is up by more than 1,000pc over the past five years.

Victoria Scholar, at Interactive Investor, said: “Bitcoin and other cryptocurrencies have been enjoying a resurgence over the past year and it feels like the crypto winter is over.”