- Bitcoin rose 7.5 percent on Thursday to $ 40,094.81.
- The red-hot cryptocurrency has seen huge volatility in recent days, with thousands of dollars per coin added and deleted in short periods.
- The excitement on Thursday came after European Central Bank chief Christine Lagarde called for more regulation the day before.
- Morgan Stanley analysts say the bitcoin focus is “surprising”
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Bitcoin rose sharply once again on Wednesday night and Thursday morning, climbing the $ 40,000 mark.
It was volatile for weeks for bitcoin, reaching a record high of nearly $ 42,000 last week before splitting. The price is constantly fluctuating around 10% per day as investors buy and withdraw from the cryptocurrency, which has grown by more than 330% in one year.
Bitcoin rose 7.5% to $ 40,094.81. Its smaller rival Ethereum rose 7.2 percent in 24 hours to $ 1,160.
The dramatic rise in the prices of bitcoin and other cryptocurrencies has sharply divided market opinion, pitting many – though not all – financial institutions against a new breed of online investors.
On Wednesday, the head of the European Central Bank, Lagarde, said that bitcoin should be regulated globally and linked it to “completely condemning money laundering”.
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She said bitcoin was not a currency, as many of its proponents claimed, but “a highly speculative asset that ran some fun business.”
Bambos Ciatalu, a financial crime lawyer at London’s Stokoe Partnership Solicitors, said tighter regulation would be a major problem for cryptocurrencies.
“A lot of people buy bitcoin and other cryptocurrencies because they’re worried and don’t trust fiat currencies,” so more regulation would destroy much of their appeal, he said.
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Yet despite raised eyebrows by regulators and central banks, the rising price has prompted some institutional investors to shop.
Morgan Stanley analysts said in a note: “With the dollar’s sharp decline, deeply negative real returns and continuing policy uncertainty, investors are looking for alternatives to traditional cash.”
They added: “Innovation in digital assets is continuing rapidly and is likely to increase
institutional participation over time. “
However, analysts warned that “perceptions of ‘value’ and demand could vary significantly, for example due to changing regulations.”
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