The world’s largest cryptocurrency advanced as much as 6 per cent to $35,842, surpassing the previous high of $34,792 set on Jan. 3. It plunged as much as 17 per cent on Monday. The digital coin quadrupled in 2020.
A range of factors have been cited for Bitcoin’s ascent, showing how hard it is to pinpoint the proximate cause for the latest bout of volatility. Some traders pointed to a JPMorgan Chase & Co. long-term price forecast of as much as $146,000, while others cited the overall risk-on mood in global financial markets.
While some argue that the cryptocurrency offers a hedge against dollar weakness and inflation risk in a world awash with fiscal and monetary stimulus, others say retail investors and trend-following quant funds are pumping up an unsustainable bubble.