Bitcoin back on the rise after vaulting to new record

Bitcoin rallied again on Wednesday after retreating briefly from an all-time high it set less than 24 hours earlier, as bulls showed few signs of pulling their bets on the world's largest cryptocurrency.

Bitcoin BTC= jumped 5% during the Asian session to an intraday peak of $66,540 in volatile trading, not too far from Tuesday's record high of $69,202. It was last 4% higher at $65,946.

The digital asset's meteoric rally - having already surged 55% for the year so far - has been fuelled by investors pouring money into U.S. spot exchange-traded crypto products and the prospect that global interest rates may fall.

The rally is backed by ETF flow and an outlook that includes an ethereum upgrade and bitcoin "halving," which slows the flow of bitcoin minting, said Lennix Lai, global chief commercial officer at crypto exchange OKX.

"The trend also indicates an elevated level of mainstream acceptance of bitcoin, perhaps more than ever before."

The approval of 11 spot bitcoin ETFs by the U.S. Securities and Exchange Commission in late January had marked a watershed moment for the industry, following an 18-month long crypto winter plagued by a string of high-profile corporate bankruptcies and scandals.

Even institutional investors who once shunned the token due to its sharp and wild moves, have begun committing long-term money too, which  expert say.  could help sustain the latest leg of its rally.

The recent optimism over bitcoin has also spilled over to its counterparts, with ether ETH=, the second largest cryptocurrency, similarly up more than 60% for the year.

It was last 6.4% higher at $3,750.

Still, some say it's hard to shake off the speculative nature of these assets. After hitting the record high on Tuesday, bitcoin sharply reversed course and fell more than 10% back below the $60,000 level.

"That looks like classic bitcoin behaviour - it chews you up then spits you back out," said Matt Simpson, senior market analyst at City Index.

"A pump and dump to previous record highs wiped out some weaker hands, and I suspect we're now in the volatile and erratic phase we usually see when it reaches a record high."