Bitcoin has surged to an all-time high on optimism about upcoming legislation.
Image: IOL
Bitcoin surged to a new all-time high of $111,534 (R2,01 million) on Thursday as US debt concerns and legislative uncertainty around President Donald Trump’s tax bill weighed on traditional equity markets.
According to AFP, the world’s most popular cryptocurrency is riding on a wave of optimism over anticipated cryptocurrency legislation in the US, which could provide clarity for the sector.
Bitcoin’s previous high was around $109,000 (R1.44 million), on March 11, 2005.
However, uncertainty over Trump’s ‘Liberation Day’ tariffs weighed on financial markets through early April, until the US President announced a 90-day pause on reciprocal tariffs on April 9.
Bitcoin broke through the $100,000 barrier once again on May 8 and has displayed solid growth throughout the month.
"Now that January's high has been surpassed - and the 50 percent upside from April's lows has been achieved - bitcoin enters blue sky territory with tailwinds in the form of institutional momentum and a favorable US regulatory environment," Antoni Trenchev, co-founder of digital asset trading platform Nexo, told Reuters.
"We're still in year four of the bitcoin price cycle - the year after the bitcoin halving when miner rewards are slashed in half - which historically means its best days are still ahead of it and - while macro uncertainty and the threat of further volatility remains, a target of $150,000 in 2025 is still very much on the cards," Trenchev added.
Bitcoin’s rally, which has also benefited other cryptocurrencies, has triggered substantial institutional interest, with Bitcoin Exchange-Traded Funds (ETFs) seeing more than $607 million (R10.9 billion) worth of inflows following the new price peak.
This institutional adoption shows growing confidence in Bitcoin as a legitimate asset class among professional investors, says Luno’s country manager for South Africa, Christo de Wit.
"This decoupling from traditional equities is particularly noteworthy," De Wit said.
"For South African investors, this development underscores the growing importance of cryptocurrency as a potential portfolio diversification tool, particularly as global economic conditions continue to evolve."