Bengaluru: Bitcoin rose on Saturday above $20,000 for first time in over two months.
Bitcoin, the world’s biggest and best-known cryptocurrency, rose 4.6% to $20,853 at 01:01 GMT on Saturday, adding $922 to its previous close.
The cryptocurrency is up 26.4 percent from the year’s low of $16,496 on January 1.
Ether, the coin linked to the ethereum blockchain network, rose 5.91 percent to $1,536.9 on Saturday, adding $85.90 to its previous close.
“The short-term outlook for bitcoin seems bright since the recent breakout from $18,000 will likely call some technical traders back into the market,” Yuya Hasegawa, crypto market analyst at Tokyo-based Bitbank, said in emailed comments and pointing to rising expectations that cooling inflation will mean the Federal Reserve slows the pace of its planned interest rate hikes.
“It was also a bit of surprise and relief that the Fed chair Jerome Powell refrained from mentioning specifics of the future monetary policy in his speech in Sweden this week and did not take a jab at the market’s somewhat premature hope for slower rate hikes,” Hasegawa added, but warned Fed officials could slap the market back down—”a recurring pattern since towards the end of last year.”
The bitcoin price suffered massive losses through 2022, exacerbated by the collapse of various crypto companies and culminating in the implosion of major crypto exchange FTX.
However, over the last two years, there has been bitcoin adoption on Wall Street, with some of the largest financial giants beginning the slow process of entering bitcoin and crypto markets.
“It’s often forgotten that institutional investors have significant lead time when taking bitcoin positions,” Tycho Onnasch, founder of institutional bitcoin lending protocol Zest.
“Many institutional investors who got interested in taking a bitcoin position during the frenzy of 2021 have now finally completed their internal processes that enable them to start trading bitcoin. Institutions can’t just fire up Coinbase and make 7-figure market buys of bitcoin whenever bullish news breaks. They have lengthy processes of setting up custody, finding brokers, setting up execution management systems, and more that make their moves possible.”
Meanwhile, others expect the flow of institutional investors into bitcoin will continue this year.
“We will see continued adoption of bitcoin and crypto in traditional banking and finance,” Alex Adelman, the chief executive of bitcoin rewards app Lolli, said in emailed comments.
“Industry leaders that launched crypto services in 2022 like BlackRock, Fidelity, and more set a new crypto-forward precedent for Wall Street which will spur competition among traditional institutions to launch a growing suite of crypto products and services.”