Bitcoin price continues to surge with a week-long rally that has seen bitcoin gain over 10% in value since the end of January. Bitcoin struck a new 30-day high of $1,056, today.
Reverting to a bullish trend similar to the beginning of the year when bitcoin broke the $1000 milestone on its way to reach gold parity, bitcoin is booming. A crackdown by the People’s Bank of China (PBoC), China’s central bank led to significant turmoil, leading to bitcoin losing a third of its value to hit a January low of $751 within days of reaching a high of $1139 on the Bitstamp Price Index.
Brushing aside such concerns bitcoin has made notable gains since the end of January, despite major Chinese exchanges putting an end to zero-fee trading and margin (leveraged) trading for Chinese investors.
The ongoing rally saw bitcoin reach a high of $964 on January 31, up from a sustained resistance level of $920 for several days toward the end of the month. Bitcoin price crossed $975 the following day and the gains quickly led to the cryptocurrency nearing the $1000 milestone for the second time in the year. On February 2nd, price scaled $1000.
Since then, price has stuck near the $1,020 as a ceiling despite a brief surge toward $1035 over the weekend. BPI figures show bitcoin price starting Monday at $1,010 before settling near the $1,020 mark. Tuesday began with bitcoin trading to the dollar at $1,023 and a sustained period of trading led to price scaling toward $1,035 at 06:00. Price rose to $1,045 following a 90-minute trading period before scaling beyond $1050 soon after midday.
At the time of publishing, bitcoin price on the BPI is continuing to rise and is trading at $1,053.31.
Some market observers see the upcoming Bitcoin ETF decision, to be made by the Securities and Exchange Commission (SEC), fueling confidence in bitcoin. If the SEC approves the Winklevoss Bitcoin Trust ETF to trade on the Bats Global market exchange, such credibility could plausibly lead to increased buying and subsequently, a marked spike in bitcoin price.
Speaking to the Wall Street Journal, Christopher Burniske, blockchain-products lead at ARK, which invests in the Bitcoin Investment Trust as a money manager, sees a more dramatic effect. In a particularly intriguing piece, he is quoted as stating:
My concern is that the launch of an ETF could lead to irrational exuberance if the price of bitcoin appreciates dramatically.
Spencer Bogart, a bitcoin analyst at brokerage Needham & Co., estimates that at $300 million, at the very least, would need to come into an approved bitcoin ETF within the first week, which could lead to a significant volume of buying. Further, he speculates that the U.S. approved ETF is unlikely to buy from China, where trading volumes are higher than U.S.-based bitcoin exchanges.
Institutional bitcoin trader Bobby Cho speculates that the market is certain to see a significant move in the event of an approved ETF taking shape. When shares of the approved bitcoin ETF are sold, the fund’s maker will have to buy bitcoin to the equivalent amount.
The market will feel the effect of authorized participants going out there and looking to source [$300 million], 10 tinmes more than the daily volume that goes through any of the exchanges.
Trump’s Early Days
Another factor that observers link toward bitcoin’s price growth in recent weeksis the influence of new American President Donald Trump’s speculated policies and executive orders enforced since taking over the office.
The uncertainty stirred by the recent immigrant ban from seven Muslim-majority nations has led to some markets losing confidence in the dollar and investors have turned toward safe haven assets like gold and bitcoin.
Since President Trump took office on January 20, bitcoin has gained over 17% in value.
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For the most recent bitcoin price analysis piece from CCN analyst Jim Fredrickson, click here.
All time references are in Coordinated Universal Time (UTC).
Image from Shutterstock. Charts from BitcoinWisdom.