As Bank of America analysts talk about the prospects of the cryptocurrency, bitcoin has returned to the psychologically important level of $50,000.
Bitcoin is up 4.8% to $50,056 as of Tuesday afternoon. The world’s largest cryptocurrency was changing hands at levels not seen in a month. Bitcoin has been rising steadily since the beginning of the month, prompting some followers to adopt the nickname ‘Uptuber’.
The broader market is also gaining ground. According to industry data source CoinMarketCap.com, the market cap of all cryptocurrencies in circulation increased by 3.6% to $2.2 trillion.
The rally comes after a downbeat summer for the cryptocurrency. Regulatory action on exchanges and other crypto companies across the world hurt sentiment.
There does not seem to be any clear impetus for the recent rally, however, comments from US Federal Reserve Chairman Jerome Powell indicating that he does not plan to regulate crypto may help sentiment.
This week analysts at Bank of America also published a helpful note on the space. The bank said it was “only the first inning” for the cryptocurrency and added that the “digital asset universe is too big to ignore”.
“We believe that crypto-based digital assets could create an entirely new asset class,” the analysts wrote. “Bitcoin is significant with a market cap of ~$900 billion, but the digital asset ecosystem is much larger.
“We think there may be more opportunities than skeptics expect. In the near future, you can use blockchain technology to unlock your phone; buy a Ferrari stock, house or share; receive dividends; borrow Take, lend, or save money; or even pay for gas or pizza.”
Bank of America cautioned that the major risk to its thesis was the regulation of the space. China recently declared all cryptocurrency trading illegal and other watchdogs around the world are trying to oversee the space.