Bitcoin is hitting all-time highs. The cryptocurrency reached $1,567 on Thursday, the highest price ever, making it more expensive than an ounce of gold.
Recently, bitcoin gained 20% in the beginning of 2017 before crashing 35% on fears China would restrict trading.
Bitcoins mostly trade on US and Japanese bitcoin exchange markets, which have a combined daily trading volume of more than $245 million and represent 66% of the global bitcoin exchange market.
The strong rise in price is mostly attributed to recent developments in Japan, where to country deemed the digital currency as a legal means of payment. “The Japanese have recently warmed their approach towards bitcoin by treating it legally as a form of payment – a ratification and bringing into the regulatory fold” said Charles Hayter of Cryptocompare, website about digital currencies.
The website also said that almost 50% of all trading volume during the past 24 hours has been achieved on the Japanese market, namely on the BTC/JPY pair.
In the Chinese market, bitcoin trades at around $1,250, as Chinese authorities tightened regulations over concerns that the digital currency could be used for money laundering. Since then, Chinese traders moved away from regulated exchanges and trade now on over-the- counter markets, which produced a decline in demand and price of bitcoins.
Even with the under-performance in China, bitcoin managed to hit record-prices several times over the last few days, and gained almost 5.6% in the past 24 hours.
Brian Kelly, founder of Brian Kelly Capital, attributed much of the move to greater interest from long- term investors. “The biggest driver right now is you’re starting to see institutional investors take a keen interest in the entire sector. I don’t think this is hot money. This is real money that’s going to sit around and build the new internet,” said Kelly to CNBC.
With the recent rally in price, the total value of all bitcoins in circulation reached a record $25 billion, making it comparable to a large-cap company in terms of market capitalization.
Analysts tracking the digital currency believe the price of bitcoin could reach as high as $2,000, and with market-cap increasing, more and more large investors will become interested in the currency. Large corporations in Japan and South Korea are already showing interest in bitcoin, with multi-billion companies like SBI Holdings and GMO Internet already involved in establishing a digital currency exchange for local traders.
Analysts said that the boost in price can also be attributed to the recent request by the BATS exchange to the U.S. SEC to review its March decision not to approve a bitcoin-tracking ETF on the U.S. market.
A technical analysis of the bitcoin chart shows that the price is moving above a positive trendline on shorter time frames. As the buying momentum is still intact, a possible strategy could be entering long positions as the price bounces of trendline. The 100-SMA is also above the 200-SMA, which gives additional upside confirmation.