Bitcoin rallies after warm words from Wall Street

Bitcoin has crossed the $50,000 level again after analysts declared that cryptocurrencies have become “too large to ignore”.

The world’s largest digital currency has rallied by a fifth over the past week as more Wall Street institutions immersed themselves in the wider crypto-space. Smaller assets, including ethereum, binance and dogecoin, have also risen sharply.

Heightened interest lifted bitcoin by 3.9 per cent to a four-week high of $50,940.36, its latest recovery in the midst of a turbulent year of trading which has highlighted its volatility.

Bitcoin was created in 2008 as strings of computer code with no physical form by a software developer using the name Satoshi Nakamoto. Intended as an alternative means of payment for goods and services, its main use so far has been in speculative trading.

Signs of a shift from the fringes of global finance to the mainstream boosted it to a record high of over $63,000 in April. Concern surrounding its environmental impact and doubts over its potential ended the rally, however, and it halved in value.

Bank of America this week became the latest firm to launch specialist coverage of cryptocurrencies and other digital assets. The space has become “too large to ignore”, its strategists told clients. The coverage will be led by Alkesh Shah, who said the ecosystem was “so much more” than bitcoin. “Our research aims to explore the implications across industries including finance, technology, supply chains, social media and gaming,” he said.

Yesterday US Bancorp launched a cryptocurrency custody service for institutional investment managers. Gunjan Kedia, who leads its wealth management and investment services, cited interest from clients which has “grown strongly” over recent years.

Gary Gensler, chairman of the Securities and Exchange Commission gave a further boost to cryptocurrencies yesterday when he said that the US will not follow China’s lead in banning digital tokens. “Our approach is really quite different,” he said. He added that any ban would probably have to be legislated by Congress.