Bitcoin soars to 5-month high of nearly $55,000

The world’s largest cryptocurrency, bitcoin, edged close to $55,000 per coin on Thursday, reaching the highest level in almost five months amid bullish sentiment, gaining over 25% this month already.

Bitcoin was trading at $54,770 at 6am GMT, up around 6% over the last 24 hours after 8.7% gains on Wednesday. Bitcoin faced major hurdles this year after hitting an all-time high of nearly $65,000 in February. A crackdown on cryptocurrencies in China and other negative factors pushed bitcoin’s price below $30,000 in July.

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This month’s rally has already propelled bitcoin’s market capitalization back up above $1 trillion, according to crypto-tracking website CoinMarketCap.

Rival cryptocurrencies, which usually reflect bitcoin’s movement, were also mostly up on Thursday, with ethereum, litecoin and XRP all trading in positive territory.

According to analysts from the cryptocurrency exchange Kraken, the fourth quarter is historically bitcoin’s best, with an average return of 119% starting from 2011. In 2020, the coin’s price nearly tripled in the fourth quarter.

Bitcoin performs historically well in October, which almost makes the rising... price now a self-fulfilling prophecy. I’ve been saying repeatedly since the summer that I expect a new all-time high in October,” Ruud Feltkamp, CEO of cloud-based automated crypto trading bot Cryptohopper, told Reuters.

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Some experts attribute bitcoin’s latest rally to the announcement by US Treasury Secretary Janet Yellen and US Securities and Exchange Commission (SEC) Chair Gary Gensler earlier this week, that Washington has no plans to ban cryptocurrencies.

Others believe that bitcoin is increasingly seen as a safe haven for investors, while traditional markets are struggling with falling stock prices, the looming energy crisis and fears over the Chinese property sector.

Global markets are derisking,” Kraken analysts wrote in their monthly report, while Charles Morris, founder of ByteTree Asset Management, noted that this might mean “bitcoin is arguably becoming more resilient against traditional market turbulence.

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According to Morris, further endorsements by traditional financial firms would push bitcoin higher still. Bitcoin has already profited from this week’s news that a hedge fund run by billionaire investor George Soros trades the cryptocurrency. Also, Bank of America Corp published its first research on cryptocurrencies and other digital assets on Monday, while bank holding company US Bancorp announced it launched a cryptocurrency custody service for institutional investment managers who own private funds.

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