Bitcoin rallies toward US$40,000 level as cryptos recover

by Jonathan Adams

The largest digital token jumped 5.2 per cent to US$39,588, while rivals like Ether also gained

Bitcoin rallied toward the US$40,000 level as cryptocurrencies recover some of the ground lost in this month’s volatile rout.

The largest digital token jumped as much as 5.2 per cent to US$39,588, while the Bloomberg Galaxy Crypto Index advanced 8 per cent as rivals like Ether also gained. The gauge had one of its worst stretches ever last week.

Virtual currencies have seen wild gyrations in recent days after billionaire Elon Musk criticised Bitcoin’s energy consumption and said Tesla was suspending payments using the token. Tough regulatory rhetoric on cryptocurrencies from China exacerbated the selloff, which saw leveraged investors unwind positions.

While staunch cryptocurrency adherents believe the bull market in Bitcoin has just paused, other commentators are more circumspect.

The end of Bitcoin’s streak above the 200-day average, and the gigantic spike in volatility, are not good signs if history is any kind of a guide at all here, Sundial Capital Research founder Jason Goepfert wrote in a note.

Mr Musk in February invested US$1.5 billion of Tesla’s corporate cash into the token and said the electric-vehicle maker would accept it as payment, before rescinding the latter decision this month.

While Mr Musk has since said he strongly believes in cryptocurrencies as long as they don’t drive a massive increase in fossil fuel use, digital tokens are still nursing losses from his spate of recent actions and comments.

The volatility, regulatory scrutiny and worries about Bitcoin’s environmental profile have dented the argument that the largest token will inevitably draw more mainstream investment.

Bitcoin is nearly US$25,000 short of its mid-April record of nearly US$65,000. The value of more than 7,000 tokens tracked by CoinGecko has fallen nearly US$800 billion to US$1.76 trillion from a May peak.

This article is for information purposes only.
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