Bitcoin price rises to highest level in 4 months. What’s behind the rally?

Bitcoin on Tuesday rose to its highest in more than four months, extending a new year rally fuelled by hopes that a potential end to central bank policy tightening will benefit the volatile asset.

The world’s biggest cryptocurrency touched US$21,594, a level not seen since Sept. 13. It was last flat at US$21,174.

Bitcoin has gained almost 30 per cent this year, buoyed in part by optimism that inflation has peaked, potentially reducing the need for tighter central bank policy.

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Bitcoin and other crypto coins soared during the COVID-19 pandemic as central banks and governments unleashed massive fiscal and monetary stimulus packages. However, a tightening of central bank credit hammered prices, triggering a string of
corporate failures.

(Reporting by Tom Wilson; editing by Alun John and Jason Neely)

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