Bitcoin broke above $85,000 on the 21st, extending a recent rally.
The cryptocurrency briefly traded at $85,229 on the morning of the 21st, U.S. Eastern time, its highest level in about eight months since January, according to CNBC.
Bitcoin had been sliding since reaching an all-time high of $126,000 in October last year. But it has climbed more than 7% over the past week in a gradual rebound. The gains came despite setbacks, including the failure of the CLARITY Act, which would establish a regulatory framework for the U.S. cryptocurrency market, to clear the Senate, and a 0.25 percentage point interest rate increase by the Federal Reserve. CNBC reported that investors are watching whether the "crypto winter" has ended.
Some market participants say investors are rotating money out of artificial intelligence stocks and into cryptocurrencies. Matt Hougan, chief investment officer at Bitwise, said that as enthusiasm for AI cools somewhat, money is flowing back into crypto.
Others argue the collapse of the CLARITY Act could turn out to be a positive. Hougan said the U.S. Securities and Exchange Commission is the most crypto-friendly agency in U.S. history, adding that the bill's failure could open the way for regulatory changes even more favorable to cryptocurrencies.
The Wall Street Journal pointed to the Washington summit between U.S. President Donald Trump and Chinese President Xi Jinping, set for the 24th local time, as the variable that will determine whether bitcoin's rally holds. The newspaper said that if the summit produces an agreement easing the U.S.-China tariff war, investor sentiment would improve sharply, including for cryptocurrencies.
