Bitcoin could rise above $10,000 within two weeks, marking its recovery to around half of its record high, according to one analyst.
“The bitcoin price is about to blast past the level of $10,000, recovering half of its losses from its all-time high,” said Naeem Aslam, chief market analyst at Think Markets UK. He expects bitcoin to pass the milstone “this week or by next week,” and added it would be “a real embarrassing moment for those who said that the currency will never recover from its losses.”
The cryptocurrency surged to nearly $20,000 in December 2017, but tumbled below $7,000 in less than two months. After dropping as low as $3,250 in December 2018, it has rallied past $8,700 this week.
“Once this market builds up a head of steam, it’s hard to stop,” said Neil Wilson, chief market analyst for Markets.com. “This is a big momentum play and the more buzz, the more traders will pile in behind the rising wave.”
Wilson doesn’t expect the recovery to last, but he cautioned against betting on a bitcoin slump.
“Standing in front of a steamroller springs to mind, if you are a natural bear,” he added. “Better to wait and let it fizzle out, which it will eventually.”
While there isn’t a clear catalyst for the price spike, there are several theories. Investors may have fled to bitcoin as a safe haven during the US-China trade war, despite research suggesting the cryptocurrency is vulnerable to short-term interest rates, expectations of stock-market and foreign-exchange volatility, and other factors that move the prices of mainstream investments.
Another driver could be growing mainstream interest. Fidelity and other brokerages are poised to allow buying and selling of cryptocurrencies on their platforms, while Facebook is reportedly recruiting payment, e-commerce, and cryptocurrency partners as it prepares to launch its own digital coin.
The bitcoin rally may come as a surprise given the raft of recent scandals in the cryptocurrency space. New York Attorney General Letitia James recently filed a lawsuit accusing the owner of the Bitfinex exchange of “ongoing fraud” and draining at least $700 million from the reserves backing its digital coin, Tether, to cover up $850 million in missing funds. Meanwhile Binance, one of the world’s largest cryptocurrency exchanges, recently announced hackers stole $40 million worth of bitcoin.
Bitcoin is up more than 130% this year at $8,720 a coin.
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