A sudden surge in bitcoin propels the value of the digital currency above the key psychological level of US$5,000
- Bitcoin’s value jumped 23 per cent to US$5,078.52 as of 1:38pm in Hong Kong, according to Bloomberg’s composite pricing
- The prices of competing coins such as Ether, Ripple and Litecoin also jumped
Bitcoin climbed suddenly on Tuesday to the highest level since November, leading a broad surge in virtual currencies that brought an end to nearly three months of calm in the US$162 billion market.
The world’s largest cryptocurrency surged as much as 23 per cent to US$5,078.52 as of 1:38pm in Hong Kong, according to Bloomberg composite pricing, with traders struggling to immediately pinpoint a reason for the gain.
Rival coins including Ether, Ripple and Litecoin also jumped, as did shares of Asian cryptocurrency-linked stocks including Remixpoint and Monex Group. The value of digital assets tracked by CoinMarketCap.com increased by about US$17 billion in an hour.
While sudden swings in bitcoin are nothing new, trading in the virtual currency has been unusually subdued this year as investors weighed the prospects for more mainstream adoption after last year’s 74 per cent crash. Market participants say big buy or sell orders in bitcoin can often lead to outsize moves, in part because volume is spread across dozens of venues. Trend-following individual investors can also exacerbate volatility.
“The bitcoin market and cryptocurrency market in general continues to be small relative to the rest of the markets and emotional,” said Jehan Chu, managing partner at blockchain investment and advisory firm Kenetic Capital. “It’s still very much subject to waves of enthusiasm. I don’t think today is anything special other than a temporary enthusiasm.”
