Price index CoinDesk shows the digital currency hit a high of $11,315.70 yesterday before dipping back to $10,962 at the time of writing.
It represents a 24-hour increase of nearly 13 percent, and brings the total value of Bitcoin in circulation to over $200 billion.
This is referred to as the currency’s market capitalisation. There are around 18.4 million Bitcoins currently in circulation.
Pricing graphs show Bitcoin has more than recovered after prices plummeted in March this year.
The impact of the coronavirus pandemic on the US and many other countries that month saw the virtual currency lose 50 percent of its value in a single day at one point.
At one point, prices dipped below $4,000 according to analysts.
By contrast, today’s price surge saw the coin increase its value to numbers not seen since August 2019.
However, some analysts have warned the notoriously fickle prices may not last very long.
Gavin Smith, head of Bitcoin organisation Panxora, expects a price “washout” this year with prices actually falling well below $8000.
He told Forbes: “Our view for the balance of 2020 is still high volatility with a year end of around $7,000 with a drive higher to new highs in 2021.”
READ: Bitcoin prices surge to over $10,000 as investors ditch other cryptocurrencies
He added the “true rally” would not take place until next year, and said the markets are currently experiencing a “massive demand shock” that is potentially lowering prices.
Some analysts have referred to Bitcoin as a “safe haven asset” – an investment people can make at times of economic turbulence or inflation.
However, Changpeng Zhao, chief executive of Bitcoin exchange platform Binance, has warned against this sentiment.
The Bitcoin expert told Bloomberg people should avoid taking this ‘safe haven’ description “too literally”.
Chinese government ramps up trials for digital currency to rival the dollar [REPORT]
Artist praised by Michael Caine launches ‘Universe’ collection for cryptocurrency market [REPORT]
Martin Lewis’ Bitcoin warning revealed: ‘You could lose everything!’ [INSIGHT]
He said: “There are always multiple factors affecting the price of an asset. If you imagine Bitcoin the same as a float, and there’s a Titanic sinking beside it, then the float will sink down with it.
“The stock market is probably a thousand times bigger than crypto markets. When that goes down, and a lot of people are losing a lot of money, many of those people who have crypto investments will want to convert those investments into cash.
“So it has an effect, when a large asset type or asset category is going down.”
However, he added Bitcoin could become a ‘safe haven’ investment over time.
Bitcoin enthusiasts say the price of the coin is driven by supply and demand.
This means the price of the virtual currency will go up when more people are buying it, and will go down when less people want to buy it.
There are other factors at play too, including political action and general confidence in the technology.
Bitcoin.org writes: “Reasons for changes in sentiment may include a loss of confidence in Bitcoin, a large difference between value and price not based on the fundamentals of the Bitcoin economy, increased press coverage stimulating speculative demand, fear of uncertainty, and old-fashioned irrational exuberance and greed.”
Experts have also warned Bitcoin can be used for criminal purposes online. In April, New York-based intelligence firm Chainalysis warned more than $900,000 worth of the currency went towards online child abuse material in 2019.
Source: Read Full Article