Bitcoin reached a new milestone on Tuesday, briefly surpassing the $57,000 mark, marking its highest level since 2001.
Bitcoin Continues to Soar
The oldest and largest cryptocurrency experienced an 11% increase over the past 24 hours, reaching $56,739. Since the beginning of the year, it has surged by over 30%.
Factors Driving Bitcoin’s Growth
Bitcoin’s recent surge can be attributed to various factors, including expectations of lower Federal Reserve interest rates, an upcoming change in Bitcoin miners’ compensation structure, and the introduction of Bitcoin exchange-traded funds. Additionally, MicroStrategy, a software company known for its crypto investments, added another $155 million worth of Bitcoin to its holdings.
Altcoins on the Rise
Other digital currencies also experienced positive momentum, with Ether rising by 6.7%, Solana by 9.5%, and Cardano by 7.7%. Even meme-based coins such as Dogecoin and Shiba Inu recorded gains of 13% and 10%, respectively.
Crypto Companies Benefit
Shares of cryptocurrency companies witnessed a boost as well. MicroStrategy’s stock rose by 6.6%, Coinbase Global by 5.1%, and Marathon Digital Holdings by 8.4% in premarket trading on Tuesday.
Uncertain Future for Bitcoin Rally
Despite the current rally, questions linger about its sustainability. Bitcoin’s all-time high stands just above $65,000, achieved in November 2021. While the advent of Bitcoin ETFs has attracted more investors, the longevity of this trend remains uncertain.
Renewed Criticisms from Central Banks
Central banks have recently renewed their criticisms of cryptocurrencies. The Atlanta Federal Reserve cautioned about the risks associated with crypto, while officials at the European Central Bank emphasized that Bitcoin is still not considered a viable payment method or investment, stating that its fair value remains zero.
Bitcoin’s meteoric rise continues to captivate the financial world, but only time will tell if this momentum can be maintained.