Bitcoin Roars Back From ‘Flash Crash’ to Breach $8,000 Once More
Peak excitement over Bitcoin is back, with the largest cryptocurrency surging again after a “flash crash” at the end of last week
(Bloomberg) -- Peak excitement over Bitcoin is back, with the largest cryptocurrency surging again after a “flash crash” at the end of last week that only temporarily dented optimism.
Bitcoin jumped as much as 17% Monday, briefly breaching the $8,000 level. Since the beginning of the year, the original digital token has more than doubled as more mainstream Wall Street firms embrace cryptocurrencies and its underlying blockchain technology. Other digital currencies, including Ether, have also seen double-digit gains.
“A strong breakout would no doubt garner a very large amount of excitement, and opens up the way for a much larger move upward,” wrote Mati Greenspan, senior market analyst at eToro, in a note Monday.
Crypto fanatics are hyping up the possibility that an exchange-traded fund that tracks Bitcoin, long seen as a major step toward widespread acceptance of digital assets, could be approved as soon as Tuesday. Internet rumors are fueling speculation that a speech by the U.S. Securities and Exchange Commission’s Hester Peirce at a conference this week isn’t mere coincidence but, instead, portends regulatory approval of the first fund.
“A Bitcoin ETF would certainly be positive both short-term and long-term,” said Lou Kerner, partner at CryptoOracle. “The amount of flows into ETFs can be very significant since a lot of investors prefer ETFs, and it obviously connotes additional market approval, government approval of Bitcoin. It really would be a bullish thing.”
“But there are lots of reasons to take news of a pending ETF with a grain of salt,” said Kerner. “There are still a lot of unanswered questions about how it would be handled.”
The SEC has delayed approving a Bitcoin ETF on concerns that prices could be vulnerable to manipulation. Peirce has long been an avid proponent of cryptocurrencies and has earned the moniker “Crypto Mom” from fellow fans.
Despite the excitement, worries over manipulation, fraud and swift price movements still persist. Bitcoin has surged beyond its “intrinsic value,” mirroring a similar move in 2017 that preceded a slump, strategists at JPMorgan Chase & Co. wrote in a note last week.
Bitcoin’s “bear market is likely over,” said Mike McGlone, Bloomberg Intelligence analyst. “Bitcoin is in a knock-around range type market for an extended period but unlikely embarking on a new parabolic run like 2017.”
To contact the reporter on this story: Vildana Hajric in New York at vhajric1@bloomberg.net
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