Bitcoin and Ether hit two-month high

The world's largest cryptocurrency gained as much as 3.1% to $45,328 on Sunday, its highest level since May 18

Cryptocurrencies are showing signs of life again after pulling back significantly from record highs in recent months. AFP

Bitcoin and Ether have reached their highest levels in more than two months after a major ethereum upgrade, defying uncertainty over cryptocurrency rules in the US infrastructure plan.

Bitcoin gained as much as 3.1 per cent to $45,328 on Sunday, its highest level since May 18. Ether increased as much as 3.5 per cent to $3,191, gaining for a fifth day amid the ethereum network’s London upgrade, which reduces the pace of growth in the coins.

“A mood of optimism appears to have returned to cryptocurrency markets,” said Paolo Ardoino, chief technology officer at Bitfinex, on Friday.

“Bitcoin is leading the charge while [Ether] continues to make gains” after its network upgrade. Still, he said, “the turbulence that we have seen in crypto markets over recent weeks is unlikely to subside”.

Cryptocurrencies are showing signs of life again after pulling back significantly from record highs in recent months, a setback blamed on concerns about China’s crackdown and questions fuelled by Elon Musk on Bitcoin’s energy usage.

However, Bitcoin is approaching its 50-day moving average, a mark it has not touched since May 26. And Ether has topped $3,000 again, after its first run above that level lasted for only a couple of weeks.

One factor still creating uncertainty: the US infrastructure bill making its way through Congress, which has duelling amendments that address reporting requirements for cryptocurrency transactions and tax collection.

The bipartisan group that drew up the legislation was counting on the extra tax revenue generated to help pay for some of the bill’s costs.

Still, that is not stopping momentum in cryptocurrencies, the market value of which has rallied back to about $1.88 trillion from a mid-June low of about $1.2tn, according to CoinGecko.com.

Other tokens such as Binance Coin, Cardano, XRP and Dogecoin have also rallied in the past week.