A rally in Bitcoin took the token to the cusp of scaling $25,000 for the first time since August amid broad gains in crypto markets as investors shook off concerns about a US regulatory clampdown.
The largest digital asset rose as much as 3% on Thursday and was trading at $24,620 as of 8.15am in London. Smaller tokens such as Ether, Cardano and Avalanche also pushed higher.
A US crackdown on certain crypto products as well as a New York regulator's move to end issuance of BUSD, the third-largest stablecoin, buffeted digital assets at the start of the week. But they have since extended a rebound from last year's rout, including a near-50% year-to-date climb in Bitcoin.
The momentum in crypto is likely making speculators close out bearish bets, further propelling the rally, said Cici Lu, founder of Venn Link Partners, a blockchain adviser.
"People forget the free float of Bitcoin can be limited at times and when shorts get squeezed the price just pops," she said.
Some $64.5 million of short positions in Bitcoin were liquidated on Wednesday, the most in about a month, according to data from Coinglass. The liquidations came alongside a near-9% jump in the token on Feb. 15.
Crypto prices are climbing as global stocks advance. The latter have been boosted by bets that Federal Reserve interest-rate hikes can quell inflation without driving the US into a recession.
The risk for the sanguine mood in global markets is that investors are too complacent about how high rates have to go, as prolonged monetary tightening could damp demand for a variety of assets.
