Bitcoin recovered its previous week's losses and surged as much as 10% to settle at $54338. And was last seen trading at again above $53461 on Tuesday.
In the previous week, investors lost a huge $200 billion in a day as Biden's proposed plan of increasing capital gains tax weighed.
Now why the volatility in bitcoin price?
There are a few reasons that pushed bitcoin prices higher today and on Monday:
1. JP Morgan Chase & Co. to offer an actively managed Bitcoin fund:
JP Morgan Chase as per reports is preparing to offer an actively managed bitcoin fund to some of the clients as soon as this summer. This shall be another break from another passively managed funds of other companies. These funds enable investors to buy and hold bitcoin without getting themselves involved.
The move in fact marks a turnaround for JP Morgan as it has a history of crticising bitcoin. Earlier the CEO of JP Morgan also called Bitcoin as fraud and 'worse than tulip bulbs'.
2. Elon Musk tweet on a Monday also influenced a sharp rally:
In its earnings call, Elon Musk of Tesla said the bitcoin market is a liquid market with an bright future. On Twitter Mush said, Tesla sold 10 percent of its holding in bitcoin to prove bitcoin liquidity as an alternative to holding cash on the balance sheet.
Further as per Zach Kirkhorn, Tesla's CFO, Tesla will continue to gather bitcoin and will make bitcoin related announcements in the future. Tesla invested $1.5 billion worth of bitcoin in February..
After receiving endorsements from big investors, bitcoin on a year to date basis has rallied 80 percent. Also, companies from Bank of New York Mellon to Goldman sachs have extended their offerings around cryptocurrencies.