- The bitcoin price rose sharply overnight to close to $60,000 before slipping back to around $58,300.
- The Fed stressed it would keep monetary policy loose, while stimulus checks are being sent out.
- Morgan Stanley plans to give its rich clients access to bitcoin as institutional interest grows.
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Bitcoin flirted with the $60,000 barrier again on Thursday after a sharp fall from record highs earlier in the week, with stimulus and institutional interest boosting the world’s biggest cryptocurrency.
The bitcoin price (BTC) was up 6.3% to $58,280 at 7.20 a.m. EDT, having earlier topped $59,500.
That was off a high of close to $62,000 touched on Saturday, but well up from a low of below $54,000 hit on Tuesday. Bitcoin has risen more than 1,000% in a year.
Ethereum’s cryptocurrency ether (ETH) rose to $1,850 on Thursday before slipping back to around $1,810.
Edward Moya, senior market analyst at Oanda, said Wednesday’s Federal Reserve statement had helped the cryptocurrency market.
The Fed said it planned to keep supporting the economy until employment and inflation picked up and foresaw no interest-rate rises until 2024.
Huge amounts of stimulus have been a key driver of the bitcoin boom, and “an accommodative Fed until the job is done should keep the world’s largest cryptocurrency strongly supported,” Moya said.
Justin d’Anethan, head of exchange sales at Diginex, said stimulus checks being sent out to Americans was another factor.
More interest from big institutions also appeared to lift the coin, with Morgan Stanley planning to offer its rich clients access to bitcoin funds, according to CNBC.
D’Anethan said: “It seems that people are buying globally, nudged by Meitu, a Hong Kong listed company, buying yet another $50 million worth of crypto and, overnight, the news that Morgan Stanley will enable its wealthier clients to access BTC funds.”
Adrian Patten, chair of currency infrastructure-provider Cobalt, said: “With such high prices, both liquidity and volumes are increasing and catching up with the more traditional asset classes.”
Other market participants are more skeptical, however, with Bank of America saying on Wednesday that bitcoin does not provide diversification or inflation protection.