Bitcoin tops $71,000 for the first time as rally builds steam

Bitcoin topped $71,000 for the first time, advancing for a sixth straight day and taking this year’s rally to almost 70 per cent. The original cryptocurrency jumped as much as 2.5 per cent on Monday as of 7.40 a.m. in London. Smaller tokens like Ether, Solana and Avalanche also advanced.

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The world’s largest cryptocurrency hit a high of $71,000, topping November 2021’s all-time peak of $68,999.99. Investor interest has increased since the Securities and Exchange Commission approved 11 spot bitcoin ETFs in late January.

Bitcoin’s meteoric nearly 160 per cent ascent since October, of which 44 per cent came in February alone, marks a sharp contrast to 2022, when the market was beaten into an 18-month long crypto winter, plagued by a string of high-profile corporate bankruptcies and scandal.

In addition to demand from a wider pool of investors, bitcoin, and crypto generally, has gotten a boost from the prospect of the Federal Reserve cutting U.S. interest rates, which often prompts investors to divert capital into assets that are higher yielding or more volatile.

Investors have lapped up crypto, mega-cap technology stocks and investment-grade corporate bonds in particular this year.

Analysts say bitcoin also benefited ahead of April’s so-called halving event - a process that takes place every four years in which the rate at which tokens are released is cut in half, along with the rewards given to miners.

Supply of bitcoin is limited to 21 million, of which 19 million have already been mined.

Despite its recent popularity, for many investors, bitcoin is simply too volatile and lacks enough real-world applications to be anything other than a speculative asset.