Bitcoin recouped its losses and surged over $50,000—its psychological support line—on Monday. The biggest cryptocurrency in the world climbed about 10 percent to close at $54,338. The digital currency, having gained nearly 3 percent in the last 24 hours, was trading at $53,461 on Tuesday.
Besides, altcoins like Ethereum, XRP, and Dogecoin—coins that tend to move in tandem with Bitcoin—were trading 3 percent, 19 percent, and 2 percent high.
Last week was a sombre week for the cryptocurrency market as the market shed more than $200 billion in a day. Bitcoin slumped below $50,000 for the first time since early March after US President Joe Biden proposed hiking taxes on capital gains.
Why the surge?
Bitcoin surged following reports that JPMorgan Chase is planning to offer an actively managed bitcoin fund to its investors.
The mega-American bank is preparing to let a group of its clients invest in a bitcoin fund for the first time, according to a report on CoinDesk. The fund could be rolled out as soon as this summer.
JPMorgan’s actively managed fund is a break from some passively managed funds of other firms. These funds let their clients buy and hold bitcoin without themselves getting involved.
The move is a sharp turn for JPMorgan as the bank has a history of criticising bitcoin. Earlier, its CEO Jamie Dimon was reported calling Bitcoin as “fraud” and “worse than tulip bulbs”.
Tulip bulb mania, also called Tulipmania, was a dutch tulip bulb market bubble of 1637. In Netherland, a sudden craze for the flower drove its values to bizarre levels, with some specimens trading at the price of upscale houses in Amsterdam. You can read more about how Tulips caused an economic crash in the 17th century, here.
On Monday, Elon Musk, on Tesla’s earnings call said the bitcoin market is a liquid market with an optimistic future. Taking to Twitter, Musk said Tesla sold 10 percent of its holdings in bitcoin to prove the liquidity of bitcoin as an alternative to holding cash on the balance sheet.
According to Zach Kirkhorn, Tesla’s CFO, Tesla will continue to accumulate bitcoin and will make bitcoin-related announcements in the future.
Tesla invested $1.5 billion worth of bitcoin in February.