The price of bitcoin has risen by more than $3,000 (£2,400) over the last week, as the cryptocurrency continues its remarkable recovery.
Bitcoin is currently trading at around $12,600 – more than triple its value at the end of March – and appears on track to pass its previous record price of $20,000, which it hit in late 2017.
Cryptocurrency market analysts have struggled to explain the dramatic turnaround in fortunes, though some have pointed to the recent announcement of Facebook’s libra cryptocurrency.
Facebook’s interest in the space has validated and drawn attention to cryptocurrency more generally, while simultaneously boosting bitcoin by virtue of its connection to the controversial technology giant.
“It’s possible that concerns over Facebook’s track record with privacy, ironically, may be leading people to be materially more interested in bitcoin – a cryptocurrency outside of any company’s control – than in Facebook’s in-house cryptocurrency,” stated a recent report from cryptocurrency firm SFOX.
Another factor that may have contributed to bitcoin’s recent run includes a renewed focus on regulating cryptocurrencies within countries that have helped foster the nascent industry.
“Positive legislation is being passed in countries that include Malta, Dubai and France,” Ana Bencic, the founder and CEO of crypto firm NextHash, told The Independent.
“This legislation demonstrates the level of awareness and appreciation of bitcoin and other cryptocurrencies by the public and with legal recognition comes a growing number of traditional investors who purchase bitcoin as a way to diversify their assets and reduce risk.”
The price of bitcoin remains notoriously difficult to predict, and some may be concerned it could be building into another bubble.
Bitcoin crashed dramatically following its 2017 peak, losing more than half of its value in less than two months.
As its price currently continues to rise, interest in bitcoin is likely to also keep rising.
Previous studies have proved a correlation between interest and price, suggesting increased interest will continue to drive price. However, this could change as quickly as it did in 2017.
