Bitcoin has broken through the $40,000 level again as the world’s largest cryptocurrency rebounds from the sell-off it suffered in recent months.
Investors in the digital asset have endured a rollercoaster ride, with the price starting the year at less than $29,000 and then rising above $64,000 in April only to fall back below $30,000.
It was trading up 1.3 per cent at around $41,200 last night, its highest level since the middle of May.
It has been buoyed by renewed hopes that it will achieve widespread adoption. A job advert rom Amazon seeking a digital currency expert for its “payments acceptance” team fuelled rumours that the American ecommerce giant was poised to start accepting cryptoassets, although the company has since denied this is the case.
Elon Musk, the tycoon behind Tesla, also boosted bitcoin last month after he said the electric car manufacturer was likely to resume accepting the currency. Musk has long been a vocal supporter of the cryptomarket, with Tesla revealing in February that it had invested $1.5 billion in bitcoin and would allow it to be used for payments for vehicles.
Musk’s comments on digital assets regularly move prices and his views are closely watched by bitcoin enthusiasts. He therefore rattled the market when he announced in May that Tesla was suspending its crypto payment plans over concerns about the environmental impact of the amount of energy that is required for bitcoin mining, the intensive computer-driven process that creates more bitcoins. This sparked a sell-off, as did other cryptic social media posts from Musk on Twitter that suggested he was cooling on bitcoin.
Cryptocurrencies including ethereum and dogecoin are notoriously volatile, meaning they are prone to big price swings. The Financial Conduct Authority, Britain’s financial services regulator, has warned people that they risk losing all of their money if they invest in the fast-growing market. Nevertheless, retail investors are increasingly drawn to digital assets in the hope of making quick profits from price moves.
The industry is attracting attention from watchdogs around the world, despite the market being largely unregulated. The FCA is among those to have targeted Binance, one of the biggest crypto exchanges.
