Regulatory and economic trends, as well as the approaching halving event to cut Bitcoin production, have led the cryptocurrency’s value to soar.
By Sarah Taaffe-Maguire, Business reporter @taaffems
The value of Bitcoin has reached a new high, just days after the previous record was broken.
On Monday morning one Bitcoin, the best-known cryptocurrency, could buy $72,219 (£56,303).
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The price of the digital asset has grown 51% in the last month alone as the so-called ‘halving’ event approaches whereby Bitcoin production will fall from 900 to 450 a day on 19 April.
The cryptocurrency has also been given a boost by regulators.
On Monday, the UK financial watchdog, the Financial Conduct Authority (FCA), became the latest regulator to pave the way for more people to invest in and track the value of Bitcoin.
It followed moves from the US regulator, the Security and Exchange Commission, to allow funds holding Bitcoin to be traded on US stock markets.
The FCA, however, has sounded a note of caution around cryptocurrency, which is largely unregulated and highly volatile.
Research from the regulator had said nearly five million Britons have purchased cryptocurrencies – but in the year to April 2022, 45% of them suffered a loss.
The FCA also said crypto assets were “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.
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Before last week, Bitcoin’s highest value was recorded in November 2021, in the run up to an earlier ‘halving’ and during the pandemic, when cryptocurrency trading and enthusiasm grew.
This was followed by a widespread sell-off – which in turn brought down prices.
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The resurgence in Bitcoin can be attributed to broader economic trends too – as US stock markets perform well, analysts expect interest rates will start being reduced as inflation has come down.