By Chibuzor Alli
Bitcoin rose above $77,000 on Friday, extending a sharp rally fuelled by optimism over proposed US cryptocurrency legislation and a move by the US Treasury to increase its buybacks of government bonds.
The world’s largest cryptocurrency by market value climbed 6.9 per cent to $77,675.94 after reaching its highest level since May. It has gained more than 20 per cent since Wednesday.
Friday marked the third consecutive session in which bitcoin rose by more than five per cent.
The latest rally followed US President Donald Trump’s call on Wednesday for lawmakers to pass the Clarity Act, a bill aimed at encouraging cryptocurrency use that has stalled in the Senate.
Bitcoin also benefited from the Treasury’s decision to double its buybacks of government bonds in an effort to reduce long-term borrowing costs.
The move boosted investors’ appetite for riskier assets after the yield on 30-year US Treasury bonds rose to levels last seen in 2007, shortly before the global financial crisis.
Lower bond yields can make safer investments less attractive, potentially encouraging investors to put more money into riskier assets such as cryptocurrencies.
“Renewed optimism around crypto progress in Washington helped light a fire under Bitcoin,” said Bret Kenwell, US investment analyst at eToro.
“Falling Treasury yields and short liquidations added fuel to the rally,” he said.
AFP
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