Cryptocurrency climbs back above $7,000

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A man walks past a bitcoin ATM in Vilnius, Lithuania.

Ints Kalnins | Reuters

Bitcoin has jumped above $7,000, continuing a stunning comeback for the cryptocurrency in 2019.

The virtual currency climbed close to $7,600 on Sunday, according to industry website CoinDesk. It’s since pared gains, but is still holding above that $7,000 level.

It marks yet another move higher for the world’s most-valuable cryptocurrency, which is now up nearly 90% since the start of the year.

That’s despite negative headlines surrounding bitcoin exchange Bitfinex, whose parent company has been hit with a probe in New York, and Binance, which was hacked in a heist that saw more than $40 million in bitcoin stolen.

“Bitcoin has been building up momentum,” Mati Greenspan, senior market analyst at social trading firm eToro, told CNBC via telephone. “Ever since the mid-December lows we’ve actually doubled in price. “

According to Greenspan, the digital currency could soar as high as “$50,000 or $100,000,” because bitcoin is still only “in the early part of its cycle.” It’s worth noting bitcoin was once worth nearly $20,000 in late December 2017, before a massive slump last year.

“It has this way of jumping 100s of percentage points and retreating,” he said. “Right now we’re coming off that huge retracement and are only seeing a small rise.”

Sunday’s rally comes amid “anticipation of announcements” at a high-profile industry event in New York, Charles Hayter, CEO of digital currency comparison site CryptoCompare, noted.

“We are seeing large trade numbers at 4 million per hour which is 4x the normal (volume) with people buying on momentum,” he said.

Bitcoin hasn’t been without its critics though. Notable people in finance from J.P. Morgan’s Jamie Dimon to famed economist Joseph Stiglitz have bashed the digital asset, with the former calling bitcoin a “fraud ” and the latter saying cryptocurrencies should be “shut down. “

Such detractors say bitcoin isn’t viable as a financial instrument because it’s highly volatile and has been known to be used for illicit activities like money laundering.

On the other hand, the cryptocurrency is hailed by advocates as a decentralized means of exchange that doesn’t require any government oversight. That’s also been a source of uncertainty for the space though, as authorities around the world scramble to figure out how to regulate the industry.

Source: CNBC

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