Bitcoin rallied on Wednesday, aided by supportive comments from Ark Investment Management’s Cathie Wood.
The largest cryptocurrency advanced as much as 7.2% to about $51,393 and was trading around the $50,000 level for much of the Asian session. The rebound follows a tough week for the token, including a drop to $45,000 yesterday that revived doubts about the durability of a breathtaking and volatile fivefold surge over the past year.
Overall investor sentiment has also been boosted by comments Tuesday from Federal Reserve Chair Jerome Powell, who signaled the central bank is nowhere close to unwinding its easy policy. Cryptocurrencies have been buoyed by a tide of monetary and fiscal stimulus to fight the impact of the pandemic.
Wood, the superstar head of Ark, said in a Bloomberg interview she’s “very positive on Bitcoin, very happy to see a healthy correction here.”
Bitcoin remains lower than its recent record of about $58,350, but the pullback so far has been “relatively modest,” Bespoke Investment Group wrote in a blog post.
The cryptocurrency rally is at the center of one of the hottest debates in financial markets. Believers see an emerging asset class being embraced by long-term investors, not just speculators. Critics fear Bitcoin is in a bubble that will inevitably burst.
Tesla Inc. Chief Executive Officer Elon Musk in recent tweets said Bitcoin prices “seem high,” having earlier called it a “less dumb” version of cash. Microsoft Corp. co-founder Bill Gates cautioned about how investors can be swept up in manias. Treasury Secretary Janet Yellen said Bitcoin is an “extremely inefficient way of conducting transactions.”