Cryptocurrencies exploded on Friday for reasons not fully understood by analysts. Litecoin was among the day’s stars, gaining 30 percent. Brokers, though, remain skeptical about the rally’s sustainability.
At one stage on Friday, bitcoin was up more than $360 at $3,800 before a bout of profit-taking saw gains pared by $76 to $3,724. The 8.3 percent one-day increase was the largest since December.
If bitcoin is the crypto market’s gold, litecoin is its silver, and that ended the day up a staggering 30 percent at a 12-week closing high of $43.81.
Ethereum gained nearly 15 percent to $121.21.
Buying appeared to follow hopeful remarks from an official at the Securities and Exchange Commission, Robert J. Jackson Jr., who said in an interview that a cryptocurrency ETF would “eventually” receive SEC approval.
Some in the market suggested that troubles in Venezuela had helped spur crypto purchases.
Amid hyperinflationary conditions that get worse with each passing week, more and more Venezuelans are turning to bitcoin as a store of value and volumes in the country are at an all-time high. For the first time, weekly traded volumes have exceeded 2000 bitcoins on the peer-to-peer LocalBitcoins exchange, TrustNodes reports.
Though something of a confidence booster, Friday’s gains fail to put bitcoin up on the year—it’s down 2.8 percent—and make hardly a dent in last year’s spectacular losses. The flagship digital currency remains more than 80 percent lower than its December ’17 high of $19,891.
As for the coming weeks, experts remain skeptical as to the sustainability of buying. A bigger and clearer catalyst is needed to turn the bear market around, thinks David Thomas, director of London-based broker GlobalBlock.
“Something needs be the catalyst to get things going again. Unfortunately, global uncertainty for a multitude of reasons is driving many to become more risk averse and so whatever that spark is, it needs to be significant,” Thomas told The Independent.