Bitcoin prices rallied over the last week, benefiting from sustained, upward momentum as bullish developments drew new entrants to the space.
The price of bitcoin, the world’s largest digital currency by market value, rose more than 12% between Sunday, June 9th and its recent high of $8,466.75, reached around 11:30 a.m. EDT, CoinDesk data shows.
At this latest price point, the cryptocurrency had climbed more than 170% since December, additional CoinDesk figures reveal.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Charles Hayter, cofounder and CEO of digital currency data platform CryptoCompare, spoke to this momentum, stating that:
“The market is seeing new entrants and excitement on a number of fronts.”
People looking to actively trade and investors who want to buy and hold are both flocking to the space, he stated.
“The rise itself attracts new entrants but there are a number of new developments underpinning the fundamentals,” added Hayter.
“It seems we have a few milestones to look forward to,” said Mati Greenspan, senior market analyst for social trading platform eToro.
He specifically mentioned Facebook, Inc.’s new digital currency, for which the social media giant plans to release a white paper next Friday, according to people with knowledge of the matter who spoke with The Wall Street Journal.
The “Facebook coin announcement” will “likely have a positive effect on prices as it brings more awareness and adoption of digital currencies and bitcoin to everyday folks,” predicted John Todaro, director of digital currency research for research firm TradeBlock.
Bakkt Futures Trading
Analysts also mentioned the latest news from Bakkt, which recently announced plans to begin testing of bitcoin futures that will be listed, traded and cleared by Intercontinental Exchange, the parent company of both Bakkt and The New York Stock Exchange.
Joe DiPasquale, CEO of cryptocurrency fund of hedge funds BitBull Capital, also spoke to this announcement, stressing that it helped provide greater certainty surrounding the launch of Bakkt.
However, David Martin, chief investment officer at U.S. asset manager Blockforce Capital, noted that for futures contracts to succeed in the long-term, they must draw continued interest.
Between April and May, “there has been a substantial 165% month-over-month increase in open interest in CME and CBOE futures contracts,” he emphasized, citing data from Blockforce and Bloomberg.
“Trading volume health is essential, but the digital asset needs to see sustained open interest from long-term holders, as well as new entrants to point toward sustainable, increasing adoption as the asset trends out of its speculative faze,” said Martin.
Changing Environment For Exchanges
Analysts also weighed in on the shifting environment for digital currency exchanges.
While many such institutions have placed limits on U.S. traders, DiPasquale lauded the positive consequences of such policy changes, stating that:
“We can see the regulatory environment gaining more clarity as several exchanges decided to restrict access to US traders and resultantly, compliant solutions are cropping up, such as Binance’s decision to launch a US-specific exchange.”
He summarized all these changes in the markets, claiming that:
“Overall, these developments are poised to bring transparency to the market and promote the influx of new retail and institutional investors.”
Disclosure: I own some bitcoin, bitcoin cash, litecoin and ether.