UPDATE 1-Bitcoin price exceeds $ 50,000, rebound slows

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(Add Chicago date, redesigns, pricing updates, add analyst comments)

LONDON / CHICAGO, Aug 23 (Reuters) – The price of bitcoin topped $ 50,000 on Monday for the first time since May, although its rebound from a multi-month slump has lost some momentum.

The world’s largest cryptocurrency was up 1.19% to $ 49,888. It had reached $ 50,562, with investors betting the prospect of increased stimulus spending in the United States would lead to further gains, and more traditional financial services firms took action in the nascent asset class.

Bitcoin has risen 82% since hitting an annual low of $ 27,700 in January.

Meanwhile, the price of rival cryptocurrency ether rose 2.71% to $ 3,329. The virtual coin has risen 91% since it fell below $ 1,740 last month.

The cryptocurrency recovery comes as some more established financial services companies offer their customers access to virtual coins. PayPal Holdings Inc said on Monday that it would allow UK customers to buy, sell and hold bitcoin and other cryptocurrency starting this week.

Edward Moya, senior market analyst at OANDA in New York City, said the late morning price drop below $ 50,000 appeared to be profit taking. He pointed out that fears of taxation of capital gains have led some traders to hold cryptocurrency as a long-term investment, thus removing some volatility from the market.

“New investors are the key to this latest bitcoin rally and all signs are showing they are comfortable with high risk,” he said in an email, adding that bitcoin “could see rapid appreciation here and might not hesitate to run for $ 60,000 if appetite for risky assets remains intact. “

Others also believe the recovery could continue if more retail investors return to the market.

“The last time bitcoin was at $ 50,000, the trends at Google (a tracking website displaying searches for bitcoin) were much higher than they are now,” said Marcus Sotiriou, a trader at the brokerage firm. UK-based digital assets GlobalBlock, in a note.

“This suggests that the euphoria of retail has not yet entered the market and that bitcoin still has a long way to go in this market cycle.” (Reporting by Anna Irrera in London and Karen Pierog in Chicago; Editing by David Holmes and Alison Williams)

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