Bitcoin jumps back above $50,000 after big dip

Bitcoin rallied back above $50,000, surpassing the key psychological level as bullish momentum returned after last week’s selloff.

The digital token climbed 8% to trade around $51,500 in early U.S. trading, reaching the highest level in a week. The cryptocurrency has been volatile. Prices plunged 21% last week and have recovered with the broad bounce back in equities.

The swings in Bitcoin and Ethereum give “the impression that they are a general barometer of risk sentiment,” said Steen Jakobsen, chief investment officer of Saxo Bank.

On Tuesday, prices dipped 2.9% after Gary Gensler, nominee for chairman of the U.S. Securities and Exchange Commission, said that making sure crypto markets are free of fraud and manipulation is a challenge for the agency.

Gensler, who served as a Commodity Futures Trading Commission chairman during the Obama administration, has been viewed as a strong advocate for digital assets. He serves as a senior advisor to the MIT Media Lab Digital Currency Initiative and teaches about blockchain technology and digital currencies.

“While the Bitcoin market reacted quickly to his comments, Gensler was largely positive about Bitcoin and cryptocurrencies,” said John Wu, president of blockchain technology firm Ava Labs. “I’m hopeful the new administration will help foster innovation in blockchains, cryptocurrencies and digital assets, instead of stifling it.”

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Bitcoin jumps back above $50,000 after big dip