Bitcoin hits $50,000 level for first time since 2021

Bitcoin has returned to the $50,000 level for the first time since December 2021, riding on the coat tails of a wider rally for US stocks.

The world's largest cryptocurrency, which hit one-month highs last Friday, maintained its momentum on Monday by rising almost 5%.

Rivals, such as ether, saw similar percentage moves.

Analysts credited several factors for recent crypto gains, saying that wider market sentiment was benefiting from growing expectations of central bank interest rate cuts.

The prospect of cheaper borrowing costs ahead helped the S&P 500 and Dow Jones Industrial Average to record intraday highs earlier in the day.

The tech-focused Nasdaq was just shy of breaking through its best-ever level.

Bitcoin's recovery from a wave of scandals, including the fraud-driven bankruptcy of the FTX exchange, was aided last month when US regulators backed the creation of 11 exchange-traded funds (ETFs).

These are investment products based on market prices that allow investors to gain exposure to bitcoin without owning the currency directly.

The Securities and Exchange Commission's decision was seen as giving cryptocurrencies a form of official legitimacy for the first time, despite deep scepticism remaining over the lack of wider rules and oversight.

The body is currently reviewing applications for ETFs linked to ether's spot price.

Bitcoin values were hurt by a wave of ETF outflows earlier this month but the price wobble ended on Friday when they were reported to have been replaced with net inflows.

The news helped leave bitcoin more than 10% up on the start of the year.

It topped $50,196 on Monday evening, according to LSEG data.

The all-time high for bitcoin's value came in November 2021 when it exceeded the $65,000 level.

Analysts said the recent surge in value was also attributable to the next bitcoin "halving" event, expected in April.

That process is designed to slow the release of bitcoin, whose supply is capped at 21 million tokens - of which 19 million have already been created.

Bitcoin rallied on the previous three halvings, the most recent of which was in 2020.

Ben Laidler, global markets strategist at eToro, said: "With [the] fourth bitcoin halving, a first Fed interest rate cut and potential ethereum spot ETF approval, all are significant for what is the smallest, youngest and most retail-dominated asset class."