A collection of bitcoin tokens sit in this arranged photograph in London, U.K. (Photographer: Chris Ratcliffe/Bloomberg)

Bitcoin Surges Most Since December After Breaching Key Levels

(Bloomberg) -- Bitcoin’s back. At least for one day.

The biggest cryptocurrency climbed 12 percent as of 5 p.m. in New York, piercing both the $7,000 and the $8,000 levels in less than an hour early in the trading day, leaving investors guessing as to what was the catalyst. Bitcoin had swung wildly between gains and losses in December while reaching a record high of almost $20,000 before crashing.

Thomas Lee, head of research of Fundstrat Global Advisors LLC, cited a combination of Santander’s plan for a blockchain-based payment application, tax-related selling almost over and speculative short investors being squeezed out of the market for the surge.

Bitcoin Surges Most Since December After Breaching Key Levels

Some backers of the digital token noted that the bearishness may be fading after the recent swoon that drove the price down more an 60 percent in a few months.

“Serious money is now entering the market for the first time,” Jeffrey Van de Leemput, an analyst at Cryptocampus, a business that offers trading courses, said in a email.“A couple days ago I helped set up a 200k btc transaction for Chinese buyers. ... Soros etc are coming in, we will now see the start of the real bubble.”

George Soros, the billionaire investor who called cryptocurrencies a bubble in January, was said last week to have authorized his $26 billion family office to trade digital assets.

The spike caused short sellers to close positions, “spurring a waterfall of buy orders,” said Miguel Schweizer of cryptocurrency hedge fund Quantia Capital. Bears had amassed record shorts of more than 38,000 Bitcoin as of yesterday on trading platform Bitfinex, according to data compiled by TradingView. Short positions plunged to about 25,000 Bitcoin Thursday.

Evercore ISI’s Rich Ross says Bitcoin looks attractive after its jump.

“As much as it pains me to say this, the chart does look a lot like other high flying stocks that I am buying on this dip,” Ross said in a report Thursday.

©2018 Bloomberg L.P.