Bitcoin surges through $8,000

Now on its longest winning streak since 2013, it has rebounded more than 150% from its most recent low in December

Bitcoin is gaining power and dragging other crytocurrencies up with it. Reuters

Bitcoin strengthened past $8,000 for the first time in about 10 months on Tuesday, crossing another milestone as cryptocurrencies continued their scorching rally.

The largest digital token climbed as much as 3.8 per cent before trading at $8,096 as of 8.15am in London, according to Bloomberg composite pricing. Tuesday’s advance follows a 25 per cent surge a day earlier, the biggest one-day increase for Bitcoin since 2014, the data show.

Other cryptos gained in Bitcoin’s wake. The Bloomberg Galaxy Crypto Index, which tracks a basket of the largest digital assets, added as much as 8.9 per cent.

Now on its longest winning streak since 2013 based on weekday pricing, Bitcoin has rebounded more than 150 per cent from its most recent low in December, with the bulk of its gains happening since April after months of relative inactivity. Various reasons have been given for the renewed momentum, including revived interest from institutional players.

There is no real fundamental explanation as to why bitcoin, the original cryptocurrency, hit a 10-month high on Monday, according to Reuters.

There is an ongoing blockchain and cryptocurrency conference in New York called Consensus, with big investors and influential market players gathered to network and discuss the current state of the industry. Bitcoin had also rallied during previous Consensus conferences.

Some analysts pointed out that Bitcoin's rally coincided with the escalating trade war between the United States and China, which eroded overall market risk sentiment. But it is too soon to declare Bitcoin as a safe-haven asset, they said.

David Thomas, of London-based cryptocurrency broker GlobalBlock, said the breaching of a key $6,000 support level last week fuelled interest among investors.

In addition, Lukman Otunuga, research analyst at FXTM, said the bullish "golden cross" is already in play on the daily charts. This occurred when the 50-day simple moving average was crossed above the 200-day moving average.

Other market participants said perceptions of Bitcoin's resilience in the wake of last week's $40 million theft from the major Binance exchange was supporting sentiment. Cryptocurrency markets have previously fallen after high-profile security breaches.

Bitcoin has almost doubled in price this year, underscoring its volatility after a bruising 2018. Last year it lost some three-quarters of its value amid tighter regulation across the world.