Bitcoin rallied back above $50 000 on Wednesday, aided by supportive comments from Ark Investment Management’s Cathie Wood.
The largest cryptocurrency advanced as much as 5.4% to about $50,557 in Asian trading. The rebound follows a tough week for the token, including a drop to $45 000 yesterday that revived doubts about the durability of a breathtaking and volatile fivefold surge over the past year.
Cathie Wood, chief executive officer and chief investment officer of ARK Investment Management LLC, speaks during the Sooner Than You Think conference in the Brooklyn borough of New York, US, on Tuesday, Oct. 16, 2018. From AI-enabled robo-investing to the implications for retail of a cashless world to the impact on monetary policy if and when governments move to digital tender, technological innovation is rapidly changing our relationship to money, creating major new opportunities but also creating poorly understood risks.
Overall investor sentiment has also been boosted by comments Tuesday from Federal Reserve Chair Jerome Powell, who signalled the central bank is nowhere close to unwinding its easy policy. Cryptocurrencies have been buoyed by a tide of monetary and fiscal stimulus to fight the impact of the pandemic.
Wood, the superstar head of Ark, said in a Bloomberg interview she’s “very positive on Bitcoin, very happy to see a healthy correction here.”
Bitcoin remains lower than its recent record of about $58,350, but the pullback so far has been “relatively modest,” Bespoke Investment Group wrote in a blog post.
The cryptocurrency rally is at the center of one of the hottest debates in financial markets. Believers see an emerging asset class being embraced by long-term investors, not just speculators. Critics fear Bitcoin is in a bubble that will inevitably burst.
Tesla chief executive officer Elon Musk in recent tweets said Bitcoin prices “seem high,” having earlier called it a “less dumb” version of cash. Microsoft co-founder Bill Gates cautioned about how investors can be swept up in manias. Treasury Secretary Janet Yellen said Bitcoin is an “extremely inefficient way of conducting transactions.”
Read: Bitcoin tumbles after Musk hints that prices are excessive
© 2021 Bloomberg