Bitcoin's struggle for momentum continues amid 'mining difficulties'

·2 min read
A PayDepot Bitcoin ATM machine is pictured in a shop in Union City, New Jersey, US
A PayDepot Bitcoin ATM machine is pictured in a shop in Union City, New Jersey, US. Photo: Reuters

Cryptocurrencies were broadly higher on Friday but bitcoin remains below the $50,000 (£36,462) mark amid mining difficulties.

Bitcoin (BTC-USD) hit a three-month high above $50,000 on Monday. It was up 0.7% on Friday morning but was trading at $47,271.

Ethereum (ETH-USD), the second biggest crypto by market cap, ticked up 0.8% to trade at $3,114.

Forbes reported that "mining difficulty", a score that refers to how hard it is for bitcoin miners to find the next block in the blockchain, saw a 13% increase, the second largest of the year.

This comes as miners continue to relocate outside China, which cracked down on bitcoin mining earlier this year. They have moved to places such as North America, Russia and Kazakhstan.

Meanwhile Citigroup (C) has become the latest entrant into the blockchain arena and is considering trading crypto futures on the Chicago Mercantile Exchange.

Bitcoin ticked up on Friday morning. Chart: Yahoo Finance UK
Bitcoin ticked up on Friday morning. Chart: Yahoo Finance UK

“As per reports, the bank has been cornered into being involved in the digital sector because of surging interest by investors,” said Naeem Aslam, chief trading analyst at Ava Trade.

“The involvement of Citigroup is significant because it operates on a large scale, operating in nearly 160 countries with more than 200 million customer accounts.”

This comes as Goldman Sachs (GS) and Morgan Stanley (MS) have also expressed interest in the sector.

“The increased adoption of cryptocurrencies by remarkable institutions around the world will continue to support further upside moves," Wael Makarem, senior market strategist at Exness, told Yahoo Finance UK.

But he added that wallet security and crypto taxation remain key concerns for investors.

Watch: What is bitcoin?

Read more: UK’s finance watchdog declares Binance is 'not capable’ of being supervised

Last month the US Senate proposed increasing surveillance over cryptocurrency transactions in a plan that it believes could generate $28bn in tax revenue.

Earlier, Aslam had said mega-investor interest suggests that a bullish rally to record-high prices is on the horizon.

Big investors have exposures in excess of $50m and since June have been purchasing digital coins worth almost $10bn.

Meanwhile regulatory scrutiny of the sector continues around the world. Earlier this week the UK's Financial Conduct Authority said the world’s biggest crypto exchange platform is “not capable” of being supervised.

Watch: What are the risks of investing in cryptocurrency?

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