Abu Dhabi, UAESaturday 19 October 2019

Bitcoin powers through $7,000 mark

Monday’s 16 per cent advance comes only a few days after the digital asset broke through $6,000

Bitcoin surged 16 per cent on Monday. Reuters
Bitcoin surged 16 per cent on Monday. Reuters

Bitcoin jumped above $7,000 and didn’t look back, as its longest winning streak since 2013 continued to rekindle the global cryptocurrency market.

Monday’s 16 per cent advance comes only a few days after the digital asset broke through $6,000 and looks set to boost investor interest in conferences on the technology underlying the biggest crypto asset that are taking place in New York this week. Bitcoin’s latest surge happened when the two US exchanges carrying futures are closed, making it potentially difficult for short sellers to cover their wagers.

“Bitcoin is acting differently since moving above its 200-day moving average” and the gains are occurring on strong volume, Fundstrat co-founder Tom Lee, a noted Bitcoin bull, wrote. Blockchain Week is underway, co-sponsored by the New York City Economic Development, and the Consensus forum is set to start, where people are “expecting a higher-quality conference,” Mr Lee said.

With fundamental analysts often struggling to explain crypto markets, traders have recently pointed to institutions increasingly embracing digital coins. The likes of Fidelity Investments plans to buy and sell Bitcoin for institutional customers soon, and E*Trade is dipping into the trading space.

Earlier this month, the Bank of Canada and Monetary Authority of Singapore announced that they had sent each other digital currencies using blockchain technology.

The most well-known digital token to as high as $7,324.64, up 16 per cent from Friday, according to composite prices compiled by Bloomberg at 7:52am New York time. Rival coins surged in a broad rally, with Bitcoin Cash up 26 per cent, and Litecoin and Ether both at least 12 per cent higher.

Hedge funds and other investors had increased their net short bet against Bitcoin in the week through May 7, the US Commodity Futures Trading Commissions said Friday. When trading opened on Monday, futures traded on CME opened 12 per cent higher.

While Bitcoin has more than doubled from its post-crash low, the crypto space is by no means free of headaches.

Binance, a crypto exchange, reported a hack of 7,000 Bitcoins with about $40 million. The companies behind the digital exchange Bitfinex and the cryptocurrency Tether recently said that the so-called stablecoin is backed by cash and short-term securities only equal to 74 per cent of the outstanding coins rather than completely pegged to the US dollar.

Binance, one of the world's biggest exchanges, said on Wednesday that hackers had stolen around 7,000 Bitcoin through phishing and viruses, the latest in a string of cryptocurrency thefts to hit exchanges across the world, Reuters reported.

According to London-based blockchain analytics company Coinfirm, the hackers moved the stolen Bitcoin through several digital wallets, with almost all the coins now sitting in seven digital addresses.

Theft remains a major problem for the emerging cryptocurrency sector, with high profile hacks alarming regulators and raising questions for larger investors over whether digital coins can be safely stored and traded.

And that’s aside from the volatility - Bitcoin peaked above $19,000 in December 2017 before crashing back to earth in the succeeding months.

Updated: May 13, 2019 04:34 PM