Bitcoin put up its best showing since February last week, as it rose 17 percent to $8,200. The largest cryptocurrency by market capitalization is down 60 percent from December’s highs but remains one of the hottest topics for investment amateurs and professionals alike.
One reason for bitcoin’s current strength is, according to analysts, the entrance into the market of institutions and other large investors. Perhaps the best demonstration of this is last week’s authorization by legendary investor and billionaire George Soros for bitcoin trading by his family-controlled hedge fund.
“Serious money is now entering the market for the first time and…we will now see the start of the real bubble,” Jeffrey Van de Leemput, analyst at Cryptocampus, told the South China Morning Post on Friday.
“A wall of institutional money will drive the markets much higher,” said a note from the team at US-based Pantera Capital, also on Friday.
Among others entering the market are major investment banks, including Goldman Sachs. Wall Street’s most prestigious institution announced in December a six-month plan to form a bitcoin trading desk. Speaking on the subject, a VISA executive, Jon Matonis, said in early April that the additional liquidity that would follow the serious involvement of banks like Goldman Sachs would support much higher bitcoin prices.
Another factor supporting bitcoin in the past week has been less negative news flow. Digital assets have faced a string of negative press in recent months, including that surrounding the regulatory crackdown on cryptocurrency trading, the crypto-advertising ban by social media giants Facebook, Twitter and LinkedIn, and the failure of lending exchange Bitconnect.
Among positive news stories this week was Yahoo Japan’s investment in yet-to-be-launched crypto exchange BitARG and the declaration by a prominent Islamic scholar that bitcoin is permissible under Sharia law, which opens up cryptocurrency investment to the world’s 1.6 billion Muslims.
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