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© Reuters. FILE PHOTO: Representations of the cryptocurrency Bitcoin are seen in this illustration dated August 10, 2022. REUTERS/Dado Ruvic/Illustration/Archive photo
SINGAPORE (Reuters) – rallied again on Wednesday after briefly retreating from an all-time high hit less than 24 hours earlier, as bulls showed little sign of withdrawing their bets on the world’s largest cryptocurrency.
Bitcoin jumped 5% during the Asian session to an intraday high of $66,540 in volatile trading, not far from Tuesday’s record high of $69,202. It was last up 4% at $65,946.
The digital asset’s meteoric rally – already up 55% year to date – has been fueled by investors pouring money into U.S. crypto exchange-traded products and the prospect of a decline in global interest rates.
The rally is supported by ETF flow and an outlook that includes an Ethereum upgrade and a Bitcoin “halving,” slowing the flow of Bitcoin minting, said Lennix Lai, global chief commercial officer at crypto exchange OKX .
“The trend also suggests increased mainstream adoption of Bitcoin, perhaps more than ever before.”
The U.S. Securities and Exchange Commission’s approval of 11 spot Bitcoin ETFs in late January marked a turning point for the industry, after an 18-month crypto winter marked by a series of high-profile corporate bankruptcies and scandals.
Even institutional investors who once shunned the token because of its strong and wild moves have started putting long-term money in as well, which experts say could help sustain the recent phase of its rally.
The recent optimism towards Bitcoin has also spread to its counterparts, with Ether, the second largest cryptocurrency, also gaining more than 60% on the year.
It was last up 6.4% at $3,750.
Still, some say it is difficult to get rid of the speculative nature of these assets. After hitting the record high on Tuesday, Bitcoin made a sharp reversal and fell more than 10% back below the $60,000 mark.
“This looks like classic Bitcoin behavior – it chews you up and then spits you out,” said Matt Simpson, senior market analyst at City Index.
“A pump-and-dump to previous record highs has wiped out some weaker hands and I suspect we are now in the volatile and unpredictable phase we usually see when it hits a record high.”
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