Bitcoin soared to an all-time high close to $70,000 yesterday – before crashing almost 15 per cent.
On a day that highlighted the volatility of cryptocurrencies, bitcoin hit a record $69,202 amid mounting speculation it could top $100,000 this year.
The rally sent it above the former peak of $68,999 reached in November 2021.
But having set a new record at around 3pm, shortly before 8 pm it had fallen below $60,000 to as low as $59,387.
The wild swings will have been felt by the 5 m British investors who own cryptocurrency.
And while the rise to a new high may encourage others to pile in, the sudden drop will serve as a reminder that crypto remains a risky and volatile asset.
UK regulators continue to insist that anyone who buys crypto could end up with nothing.
Laith Khalaf, head of investment analysis at broker AJ Bell, warned that consumers should remain vigilant about bitcoin.
‘As ever, retail investors shouldn’t bet their shirt unless they’re willing to lose it,’ he said.
And Brent Donnelly, trader and president at analysis firm Spectra Markets, said many will see the new highs as a chance for ‘significant profit taking’.
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Having reached its previous 2021 high, bitcoin crashed back below $16,000 in the so-called ‘crypto winter’ of 2022.
That was when the industry was engulfed in scandal following the collapse of crypto exchange FTX and the subsequent conviction of its founder Sam Bankman-Fried for fraud.
But it has risen nearly 160 per cent since October last year, including 44 per cent in February alone.
Crypto was given a major boost in January when the US Securities and Exchange Commission approved 11 so-called ‘exchange traded funds’ (ETFs) linked to its price.
This was seen as a major regulatory breakthrough that brought bitcoin into mainstream finance.
Gold also hit a record high of $2,141 an ounce yesterday as it beat the previous peak of $2,135 reached in December last year.
Bitcoin, gold and other assets have also been boosted by hopes of interest rate cuts in the US and beyond in the coming months.
‘The bitcoin all-time high marks a turning point for crypto,’ said Nathan McCauley, chief executive and co-founder of crypto platform Anchorage Digital.
‘Traditional institutions were once sitting out. Today, they are here in full force as the principal drivers of the crypto bull market.’
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