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| Bitcoin's rally is expected to continue. (Source: Shutterstock) |
The world's largest digital currency hit $52,749, its highest level since December 2021.
The coin's market capitalization also rose back above $1 trillion this week, according to cryptocurrency data platform CoinGecko.
Bitcoin prices have risen more than 20% this month and have more than tripled since January 2023.
While it has yet to recover to anywhere near its November 2021 all-time high of nearly $69,000, the coin has reversed much of its losses since its late-2022 crash.
This recovery is largely due to US authorities giving the green light to the creation of spot bitcoin exchange-traded funds (ETFs) and allowing investment in this digital currency without having to directly buy it.
Mr. Charlie Morris, an expert at the cryptocurrency analysis company ByteTree, commented that the second factor driving the increase of bitcoin is the bitcoin halving event.
Bitcoin halving is the process of halving the rewards miners receive for mining the currency, slowing down bitcoin's inflation which occurs every 210,000 blocks, or once every four years.
Bitcoin's next halving is expected to take place in April.
Bitcoin’s appeal is also bolstered by the prospect of major central banks, notably the US Federal Reserve, cutting interest rates in the second half of this year. Lower interest rates would increase demand for riskier assets.
However, Walid Koudmani, an analyst at XTB, warns that while the market is euphoric, investors need to be alert to the potential volatility and regulatory uncertainty that comes with the cryptocurrency sector.
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