CRYPTOCURRENCIES were back in the spotlight today after a surge of buying in Asia sent bitcoin and rivals soaring.
Bitcoin hit its highest since March 2018, surging past $11,000 per digital coin. It is up more than 170% this year.
Around $30 billion (£23.5 billion) was added to the value of cryptocurrencies over the past two days, with buyers in India flagged as particularly busy.
Analysts say Facebook’s recent move to launch its own cryptocurrency project, dubbed Libra, has given renewed credibility to an industry that looked as if it had lost its way.
Last year Bitcoin crashed from a high of $20,000 to just above $3000.
Other cryptocurrencies, Ethereum, XRP and Litecoin, also rocketed over the weekend, before easing slightly this morning.
Craig Erlam of trading firm Oanda said: “The publicity that the [Libra] launch has once again brought to the space combined with the legitimacy it offers has understandably excited the community and we’ve seen before that you don’t get a normal response when this happens. Whether it actually endorses something like Bitcoin or not is perhaps not that important right now, particularly to those that have never lost the faith.”
Some think the latest rally could be even more shortlived than previous surges. Neil Wilson of Markets.com said: “Bitcoin is sparkling again but beware... breakdown’s coming up round the bend. Investors are ignoring what happened the last time we saw parabolic rises like this. Is it different this time? No, but people have short memories.
“Facebook’s Libra white paper may have stoked renewed interest in cryptos at a time when the buzz had already returned.”
In recent times big-name bankers, initially sceptical of bitcoin, have started exploring ways to make money from the trend. JPMorgan, led by Jamie Dimon, is in favour of blockchain, the technology that makes bitcoin trading possible, but has been critical of the currency itself.
Goldman Sachs has been working on a derivative of bitcoin for clients who want to trade it.
