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Bitcoin has gained over 205 percent since January and has now climbed above US$11,000 for the first time since March 2018.
On Tuesday (June 25), bitcoin reached US$11,454, tipping its market cap over US$200 billion.
The last time bitcoin climbed above US$11,000 was in March 2018. According to CoinMarketCap, bitcoin now accounts for over 60 percent of the entire market cap of the cryptocurrency market. Just last week, bitcoin surpassed the US$10,000 mark, and it has continued to climb.
Bitcoin opened the year at US$3,754 and has soared over 205 percent year-to-date. Ethereum, the second largest cryptocurrency, reached US$314 on Tuesday; it started the year off at US$135 and has risen 132 percent since then.
“On April 1, there was a large US$100 million buy order that hit the tape for bitcoin. It popped the market 15 percent and the market has not looked back since,” David Martin, chief investment officer at Blockforce Capital, told the Investing News Network (INN). “The market since then is up (more than) 150 percent since that day.”
Martin added that no single catalyst is behind the surge in bitcoin prices, but said that trading volumes have continued to rise.
“Binance is the most liquid cryptocurrency exchange, and they just continue to see their volume increasing. They’re actually 3 percent away from their highs of volume that they experienced in 2017.”
Martin said that in 2017 investors were focused mainly on the price of bitcoin. In 2018, as the price of bitcoin dampened, companies began developing more blockchain application and use cases. Now, 2019 has shown that a number of these blockchain applications can be integrated into business operations.
“Over time, we think companies that are embracing blockchain are going to have a distinct business advantage over companies in their industry that aren’t embracing blockchain,” Christian Magoon, CEO of Amplify ETFs, the first actively managed ETF to invest in blockchain-based companies, told INN.
Amplify ETFs’ Transformational Data Sharing ETF (ARCA:BLOK) has risen over 22 percent year-to-date. The company’s top holdings include a number of small-cap pure-play blockchain companies.
Facebook’s (NASDAQ:FB) Libra whitepaper announcement on June 18 corresponds with recent price movements in bitcoin. Libra, whose mission is to empower and provide access to banking for 1.7 billion unbanked users, is anticipated to launch in 2020. Since the announcement, Facebook shares have seen double digit returns since the beginning of the month, rising to US$188.84 on Tuesday.
Also on Tuesday, LedgerX received the green light from the Commodity Futures Trading Commission to trade bitcoin futures. This means that retail and institutional investors can purchase bitcoin futures, options and swaps from LedgerX.
The move will further develop a derivatives market for bitcoin and will allow investors to speculate on the future price of bitcoin. Investors will be able to go long on bitcoin, betting that the price will go up, or go short, betting that the price will drop.
“Until now bitcoin futures have been settled in cash, such as US dollars,” states the Financial Times. “Physically settled contracts mean customers will be paid in cryptocurrency when the contract expires, in the same way that buyers of oil or foodstuffs take physical delivery of the product.”
According to the Wall Street Journal, bitcoin futures trading activity on the Chicago Mercantile Exchange has risen over the past few months, which is also in line with the rise in the price for the cryptocurrency.
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Securities Disclosure: I, Dorothy Neufeld, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.