The value of the best-known cryptocurrency, Bitcoin, has reached a new high.
For the first time ever one Bitcoin bought $69,202 (£54,404) on Tuesday afternoon, surpassing the previous high just below $69,000 (£54,242) recorded in November 2021.
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It comes, as the previous high did, as a ‘halving’ event approaches, whereby Bitcoin production is cut by 50%.
A recent boost for the digital asset also came in January as a new product was launched that allows people to track the value of Bitcoin without owning it, something known as an exchange-traded fund (ETF).
Bitcoin values dropped slightly as the afternoon wore on, with $66,447.16 (£52,240) being equal to one Bitcoin.
The next halving occurs on 19 April. Roughly 900 new Bitcoins are created every day, but this is to be cut to 450.
Bitcoin experienced a remarkable rally in recent weeks having increased 62% in value in the last month alone.
Similarly, major stock market indexes, including the US S&P 500, NASDAQ 100 and France’s CAC 40, have also grown in value over the past year. The rate of price rises – inflation – has fallen and expectations of reduced interest rates (and cheaper borrowing as a result) have grown, fuelling the improved outlook.
The volatile cryptocurrency had crashed from the previous 2022 highs following a widespread sell-off after interest in Bitcoin and trading grew during the COVID-19 pandemic and associated lockdowns.
Investors had pulled back from risky investments due to more expensive borrowing costs – due to central banks bringing up interest rates – and rising inflation. These conditions led to a fall in stock market values overall.
The UK financial regulator, the Financial Conduct Authority (FCA), has said nearly five million Britons have purchased cryptocurrencies – but in the year to April 2022, 45% of them suffered a loss.
It described crypto assets as “high risk and largely unregulated” despite its introduction of a 24-hour cooling-off period for first time buyers, a ban on “refer a friend” bonuses and a crackdown on advertising rules.
