Bitcoin Closing Out Its Best Quarter Since the Bubble With Another Rally
Bitcoin Closing Out Its Best Quarter Since the Bubble With Another Rally
(Bloomberg) -- Bitcoin surged anew Friday, and is set to cap the best quarterly rally since the height of 2017’s cryptocurrency bubble with another push higher following a week of extreme swings in prices.
The largest cryptocurrency jumped as much as $1,408, or 13%, to $12,094 in New York trading, according to prices available on the Bloomberg terminal. Bitcoin has almost tripled since March, the biggest quarterly jump since the three months ended in December 2017, which closed out a 1,400% return that year. The surge was followed by a more than 70% plunge in 2018.
Just as Bitcoin was left for dead following its spectacular crash, it’s gone on a tear this year. True believers chalk it up to its staying power and, they say, its ability to drastically alter the way money is spent around the world. That’s meant looking past numerous hacks, instances of fraud, theft, and a dearth of real-world uses as prices pushed higher.
“What’s different about the increasing Bitcoin price this time is it’s retracing familiar territory with supportive institutional and macroeconomic drivers,” wrote Bloomberg Intelligence analyst Mike McGlone in a note. “Some back-and-fill in the Bitcoin price supports its migration to becoming a digital version of gold.”
But much of its meteoric rise can still be attributed to optimism about eventual greater mainstream acceptance. Fidelity Investments is among a growing number of Wall Street institutions that have been embracing cryptocurrencies and the blockchain technology that powers them. JPMorgan Chase & Co. said this week it is seeing interest from clients in a prototype digital token.
The biggest announcement came from Facebook Inc., which unveiled plans for its own cryptocurrency named Libra. The social media giant, in conjunction with a group of partners including Visa Inc. and Uber Technologies Inc., hopes it will one day trade much like the U.S. dollar, and that’s heartened crypto’s biggest fans.
“Libra’s launch is undoubtedly an exciting move for the industry,” said Herbert Sim, head of business development at Broctagon Fintech Group. “This would be a huge step towards crypto going mainstream.”
Despite Bitcoin’s resurgence this year, volatility hasn’t gone away. Prices for the largest online token have oscillated wildly, reviving well-known themes that dominated the digital-asset universe during the 2018 crash. This week’s price swings epitomize its fickle nature: Bitcoin gained close to 40% through Wednesday before reversing course and nearly wiping out its weekly gain. It then surged again on Friday.
“For Bitcoin enthusiasts, this monster rally comes as no surprise,” Mati Greenspan, senior market analyst at trading platform eToro. “In fact, we’ve been expecting it.”
Other digital tokens have also gained. The Bloomberg Galaxy Crypto Index, which tracks some of the largest cryptocurrencies, as well as Litecoin, have each gained more than 90% this quarter. Ether is up more than 110% in the same period.
To contact the reporter on this story: Vildana Hajric in New York at vhajric1@bloomberg.net
To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Dave Liedtka
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