Item 1 of 2 Sparks strike representation of cryptocurrency Bitcoin in this illustration taken November 24, 2024. REUTERS/Dado Ruvic/Illustration/File Photo
[1/2]Sparks strike representation of cryptocurrency Bitcoin in this illustration taken November 24, 2024. REUTERS/Dado Ruvic/Illustration/File Photo Purchase Licensing Rights
LONDON/NEW YORK, May 21 (Reuters) – Bitcoin rose to its highest level on record on Wednesday, eclipsing the previous high from January, as risk sentiment continues to improve after last month’s tariff-induced selloff.
The world’s largest cryptocurrency touched a high of $109,760.08, and was last up 1.1% at $108,117.
Sign up here.
Its ascent was driven by a combination of factors including easing trade tension between the United States and China and Moody’s downgrade of U.S. sovereign debt which has prompted investors to seek alternative investment sources to the dollar.
“Now that January’s high has been surpassed – and the 50 percent upside from April’s lows has been achieved – bitcoin enters blue sky territory with tailwinds in the form of institutional momentum and a favorable U.S. regulatory environment,” Antoni Trenchev, co-founder of digital asset trading platform Nexo, said in an emailed comment.
Bitcoin at times trades in a similar fashion to tech stocks and other assets that rise in value when investor sentiment is high. The tech-heavy Nasdaq (.IXIC)
, opens new tab is up 30% from its early April low.
That has also coincided with continued weakness in the dollar (.DXY)
, opens new tab, a further boost for bitcoin’s exchange rate against the U.S. currency.
Crypto market participants often point to increased involvement from traditional financial firms as reasons for its gains.
This week they have referenced JPMorgan CEO Jamie Dimon, a longtime crypto skeptic, who said the bank will let clients buy bitcoin. Earlier this month, crypto exchange Coinbase (COIN.O)
, opens new tab was added to the S&P 500 index.
Coinbase said on Monday the U.S. Department of Justice has opened a probe into a recent data breach at the company.
“We’re still in year four of the bitcoin price cycle – the year after the bitcoin halving when miner rewards are slashed in half – which historically means its best days are still ahead of it and – while macro uncertainty and the threat of further volatility remains, a target of $150,000 in 2025 is still very much on the cards,” Trenchev said.
Meanwhile, ether, the second-largest cryptocurrency, surprisingly did not rise in tandem with bitcoin. It was last down 0.5% at $2,513 .
Reporting by Samuel Indyk and Alun John in London and Gertrude Chavez Dreyfuss in New York; Editing by Dhara Ranasinghe and Matthew Lewis
Our Standards: The Thomson Reuters Trust Principles.
