Bitcoin pulls back after hitting fresh record near $50,000

NEW DELHI: In a first, Bitcoin prices came close to hitting the $50,000 level over the weekend, as Canada on Friday became the first country in the world to clear the launch of a bitcoin exchange-traded fund (ETF). The world’s biggest cryptocurrency had hit an all-time high of $49,716.44 on Sunday.

The digital asset pared some of the gains and traded at $47,500, down 2.61%, at around 0230pm on Monday, as per data available with crypto exchange WazirX.

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Other major cryptocurrencies such as ethereum, tether, and ether, however, traded in the red.

On Friday, Reuters reported that the Ontario Securities Commission has approved the launch of Purpose Bitcoin ETF by Toronto-based asset management company Purpose Investments Inc.

There were a lot of major developments in the bitcoin space last week, from Tesla disclosing holding in the cryptocurrency to major financial institutions such as Mastercard, BNY Mellon and Deutsche Bank revealing their crypto plans. Driven by interest from some of the major companies, prices of bitcoin have surged more than 60% since the start of the year.

"Last week we saw not just companies such as Tesla and MasterCard, but governments acknowledging bitcoin as a digital asset much like gold. Canada approved the first bitcoin ETF. The US city of Miami is considering a city bitcoin treasury. The trend is clear; democracies like the US, the UK, Canada, and Australia are crypto-friendly, while China and Russia are not,” said Vikram Rangala, chief marketing officer at ZebPay.

Meanwhile, Christopher Wood, global head of equity strategy at Jefferies, has again come out in support of the crypto asset, saying he remains extremely bullish on bitcoin and those who are not yet invested must take advantage of any pullbacks.

“Remember that institutional ownership of bitcoin has only just begun. It should also be remembered that bitcoin rose by 85 times in the 12 months after the first November 2012 halving and by 30-fold in the 18 months after the July 2016 halving. It has so far risen by “only” 418% since the most recent halving in May 2020. Meanwhile, it is surely only a matter of time before a bitcoin ETF is approved by the Securities and Exchange Commission (SEC) in America,” Wood wrote in the latest edition of the Greed & Fear newsletter released on 12 February.

A recent report in Mint said the Indian government plans to make mining, holding, selling, issuing, transferring, and using cryptocurrency a punishable offence, with a heavy fine or imprisonment or both.

The report, citing government sources, said the proposed cryptocurrency bill may allow holders of such currencies to exit the asset class before its anticipated ban but may put a heavy penalty on its conversion to a legal asset.