Bitcoin prices shot up 15% Tuesday and briefly rose above the $5,000 level for the first time since November. But good luck finding a reason to explain the sudden spike.
Nigel Green, founder and chief executive of deVere Group, simply said in a report that “there is a growing sense that Bitcoin is back.”
Green added that “this dramatic jump is likely to attract many investors who have been sitting on the sidelines,” including big institutions.
Wild swings for bitcoin are the norm. So this shouldn’t be all that surprising, argued Naeem Aslam, chief market analyst with TF Global Markets (UK) Ltd, in a report.
“Bitcoin is a kind of a beast which has the ability to score more than 20% gain on a daily basis and we have seen this kind of rally towards the end of 2017 before the price crashed,” Aslam wrote.
He added that the big bitcoin () spike “is going to attract many investors who have been sitting on the sideline and waiting for this moment.”
Reason for the bitcoin price surge is a ‘mystery’
In other words, bitcoin is higher simply because people are buying bitcoin. It’s a classic case of momentum investing on steroids and there might not be any real fundamental rhyme or reason to justify the spike.”
Bitcoin has always been a favorite plaything for traders looking to cash in on sudden moves. This recent rally may be nothing more than that.
Nonetheless, there is no denying that bitcoin is once again having a moment. Bitcoin is now up about 25% this year and more than 60% from a recent low of around $3,100 in December.
And more online retailers, such as Overstock (), Shopify ( ) and Newegg, are accepting bitcoin and other cryptocurrencies as a form of payment.
Mutual fund giant Fidelity established a trading platform for bitcoin and other cryptocurrencies late last year.