Bitcoin value hits new all-time high
In common with many other investments, the cryptocurrency had suffered a massive fall as the pandemic receded in 2022. But just as the fall was sharp, the recent rise is steep, as stock markets overall have grown amid optimism over declining inflation and expected interest rate drops.
Monday 11 March 2024 16:09, UK
The value of the best-known cryptocurrency, Bitcoin, has reached a new high.
For the first time ever one Bitcoin bought $69,202 (£54,404) on Tuesday afternoon, surpassing the previous high just below $69,000 (£54,242) recorded in November 2021.
Update:
Bitcoin value hits another new high
It comes, as the previous high did, as a 'halving' event approaches, whereby Bitcoin production is cut by 50%.
A recent boost for the digital asset also came in January as a new product was launched that allows people to track the value of Bitcoin without owning it, something known as an exchange-traded fund (ETF).
Bitcoin values dropped slightly as the afternoon wore on, with $66,447.16 (£52,240) being equal to one Bitcoin.
The next halving occurs on 19 April. Roughly 900 new Bitcoins are created every day, but this is to be cut to 450.
Bitcoin experienced a remarkable rally in recent weeks having increased 62% in value in the last month alone.
Similarly, major stock market indexes, including the US S&P 500, NASDAQ 100 and France's CAC 40, have also grown in value over the past year. The rate of price rises - inflation - has fallen and expectations of reduced interest rates (and cheaper borrowing as a result) have grown, fuelling the improved outlook.
The volatile cryptocurrency had crashed from the previous 2022 highs following a widespread sell-off after interest in Bitcoin and trading grew during the COVID-19 pandemic and associated lockdowns.
Investors had pulled back from risky investments due to more expensive borrowing costs - due to central banks bringing up interest rates - and rising inflation. These conditions led to a fall in stock market values overall.
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The UK financial regulator, the Financial Conduct Authority (FCA), has said nearly five million Britons have purchased cryptocurrencies - but in the year to April 2022, 45% of them suffered a loss.
It described crypto assets as "high risk and largely unregulated" despite its introduction of a 24-hour cooling-off period for first time buyers, a ban on "refer a friend" bonuses and a crackdown on advertising rules.