© Reuters. FILE PHOTO: In this illustration, representations of the Bitcoin cryptocurrency are seen, August 10, 2022. REUTERS/Dado Ruvic/Illustration/File Photo
SINGAPORE (Reuters) – It rallied again on Wednesday after briefly retreating from a record high it set less than 24 hours earlier, as bulls showed few signs of withdrawing their bets on the world's largest cryptocurrency.
Bitcoin jumped 5% during the Asian session to an intraday high of $66,540 in volatile trading, not far from Tuesday's all-time high of $69,202. It was last up 4% at $65,946.
The digital asset's meteoric rally, which is already up 55% so far this year, has been fueled by investors pouring money into U.S. spot exchange-traded crypto products and the prospect that rates global interest rates may fall.
The rally is supported by ETF flow and an outlook that includes an Ethereum upgrade and a bitcoin “halving,” slowing the flow of bitcoin minting, said Lennix Lai, global chief trading officer at crypto exchange OKX. .
“The trend also indicates a high level of widespread acceptance of bitcoin, perhaps more than ever.”
The approval of 11 spot bitcoin ETFs by the U.S. Securities and Exchange Commission in late January marked a watershed moment for the industry, following an 18-month crypto winter plagued by a series of bankruptcies and high-profile corporate scandals.
Even institutional investors who once shunned the token due to its sharp and wild movements have also started committing money for the long term, which experts say could help sustain the latest leg of its rally.
The recent optimism about bitcoin has also rubbed off on its peers: ether, the second-largest cryptocurrency, is also up more than 60% for the year.
It was last up 6.4% at $3,750.
Still, some say it's difficult to get rid of the speculative nature of these assets. After hitting the all-time high on Tuesday, bitcoin sharply reversed course and fell more than 10% below the $60,000 level.
“That seems like classic bitcoin behavior: It eats you up and then spits you out,” said Matt Simpson, senior market analyst at City Index.
“A pump and drop to previous all-time highs wiped out some weaker hands, and I suspect we're now in the volatile, erratic phase we normally see when hitting a record high.”
