Bitcoin At $50,000: Here's What Pushing The Cryptocurrency To Rise

Bitcoin had surpassed the $50,000 mark in early September, but a crash washed away its gains
Bitcoin had surpassed the $50,000 mark in early September, but a crash washed away its gains

Bitcoin, the world's oldest and largest cryptocurrency, has again breached the symbolic $50,000 (Rs 37.47 lakh) mark for the first time in a month. The rise has boosted market sentiment that the cryptocurrency may be poised for another major rally as it gained nearly $9,000 (Rs 6.74 lakh) over the past week. But it also calls for caution since Bitcoin has been on a wild run throughout this year. The virtual currency has shown extreme volatility, rising to its all-time high of $64,000 (Rs 48 lakh) in April as big companies and institutions such as Tesla bought into digital assets, and then breaking below $30,000 (Rs 22.49 lakh).

Bitcoin had surpassed the $50,000 (Rs 37.48 lakh) mark in early September but a crash soon after washed away all its gains. Several other crypto coins too lost their value. For months, Bitcoin hovered a little over $30,000 but in late July it began to rise again, albeit slowly. According to CoinMarketCap, a market research website, Bitcoin was trading at $50,744 (Rs 38.04 lakh) on Wednesday afternoon.

Crypto experts say so far, there seems no particular reason for Bitcoin to surge suddenly, except that there is a renewed interest in it from investors who are spooky about trading in stocks. There's a historical perspective to stock trading in October – the worst US market crashes happened in this month in 1929, 1987 and, most recently, in 2008.

Most investors also see a hope that Bitcoin may replicate the same performance it showed in the fourth quarter of last year. At the beginning of October 2020, Bitcoin was trading around $11,000 (Rs  8.24 lakh) but in the next two months, it reached close to $30,000, a milestone it eventually breached in January 2021. However, experts also advise new investors to not increase their crypto investment to over 5 percent of their total portfolio.

About the current rise, Mike Novogratz, former hedge fund manager and crypto billionaire, suggested in a tweet that Bitcoin might have started the fourth quarter rally again.