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Bitcoin pared its rally this week after briefly climbing past $55,000 amid ongoing speculation about whether the largest cryptocurrency can test the record it set last month.
The token fell as much as 2.1% and was trading at about $53,500 as of 12:01 p.m. in Hong Kong. It remains on track for a second straight weekly advance, bouncing back from a rout at the end of February.
“It wouldn’t shock to see the price make an assault on the February high of $58,350,” Chris Weston, head of research at Pepperstone Group Ltd., wrote in a note.
Growing talk of institutional interest in Bitcoin and the possibility that U.S. stimulus checks will bolster flows into financial markets are combining to lift cryptocurrencies. The digital token has risen about 600% in the past year, splitting opinion on whether a precarious bubble or bigger bull run lies ahead.
Bitcoin’s move higher this week has come as “the U.S. passed the stimulus bill, and on the back of MicroStrategy and Meitu purchasing Bitcoin,” said Annabelle Huang of crypto financial-services firm Amber Group.
“We have seen an increase in interest levels from institutional players globally,” she added. “In China, a lot of high net worth individuals have been inquiring on how to add Bitcoin to their portfolio.”
Recent trends signal digital tokens are stepping closer to mainstream finance.
For instance, JPMorgan Chase & Co. has filed to issue notes linked to a basket of crypto stocks like MicroStrategy Inc. and Nvidia Corp. Goldman Sachs Group Inc. has said it’s seeing substantial demand from institutions as it works to restart its cryptocurrency trading desk.