Market Extra: 5 reasons bitcoin is roaring to its highest level ever, defying Dimon’s ‘fraud’ call

Bitcoin notched a fresh record on Friday and solidified its recent run-up in price after tumbling on the back of a series of critical comments, including those from J.P. Morgan Chase CEO Jamie Dimon, who referred to the asset as a “fraud.”

A single bitcoin BTCUSD, +5.05%  on Friday was worth around $5,600, after touching an intrasession high near 5,900 earlier in the day, far exceeding its early September peak around $5,000. The cybercurrency has risen by about 90% since hitting a low of $2,985.24 in mid-September, research-and-data site CoinDesk shows.

Although it isn’t entirely clear why the digital currency is resurgent, here are a few reasons market participants attribute to its record-setting advance:

1. Bets on digital-currency dividend

Some investors are wagering that a pair of so-called hard forks in core bitcoin, which will create two separate versions of the No. 1 cryptocurrency, will boost the holding of digital-currency assets.

  • On Oct. 25, so-called Bitcoin Gold designed to address challenges mining for bitcoin using computers to solve complex problems, will be launched.
  • On Nov. 18, bitcoin will face a second version of Segregation Witness, or SegWit2x, which would create an alternative version of the bitcoin.
2. China bitcoin exchanges

Charles Hayter, chief executive officer and founder of CryptoCompare, said heightened speculation that China may license digital-currency exchanges and allow them to reopen after a recent ban. Beijing last month moved toward a broad clampdown on bitcoin trading.

Read:

3. Amazon.com speculation

There are rumors about Amazon.com Inc. AMZN, +0.20%  accepting bitcoin on its retail platform. According to a blog post on Seeking Alpha, Amazon could announce that it will accept bitcoin as payment on its site when it reports quarterly results Oct. 26, which could lead others, including Alibaba Group Holding Ltd. BABA, -1.15% to follow suit.

4. FOMO

Fear of missing out, or FOMO, also may be propelling bitcoin and other cyber currencies higher. A cycle of news covering the virtual currency’s path to new heights can draw fresh attention to it and encourage further buying, thereby propelling the asset ever higher.

Of course, there are plenty of worries that the asset has all the telltale signs of a speculative bubble.

5. Wall Street attention

As the virtual currency gains more attention from average folks, it is also garnering eyeballs and investments from hotshot Wall Street veterans. A co-founder of alternative asset manager, Fortress Investment Trust, Michael Novogratz is starting a $500 million fund to invest in cryptocurrencies and told CNBC during a recent interview that the cryptographic currency could be worth $10,000 in six to 10 months.

Meanwhile, Goldman Sachs Group GS, -0.53% is reportedly exploring a new trading platform that would be centered on trading in bitcoin and its rivals, like Ether.

Filed in: Top News Tags: 

You might like:

God-fearing countries are among the least wealthy—with one notable exception God-fearing countries are among the least wealthy—with one notable exception
America’s 1% hasn’t controlled this much wealth since before the Great Depression America’s 1% hasn’t controlled this much wealth since before the Great Depression
Women don’t see men who drive flashy cars as husband material Women don’t see men who drive flashy cars as husband material
The New York Post: Trump dubs himself ‘your favorite president’ in tweet about Michael Cohen tape The New York Post: Trump dubs himself ‘your favorite president’ in tweet about Michael Cohen tape
The Wall Street Journal: Cease-fire in place between Israel and Hamas in Gaza Strip The Wall Street Journal: Cease-fire in place between Israel and Hamas in Gaza Strip
The New York Post: New York Giants owner says Trump lacks understanding of NFL players’ anthem protests The New York Post: New York Giants owner says Trump lacks understanding of NFL players’ anthem protests
The New York Post: Most of music business’s top money makers in 2017 had been at it for decades The New York Post: Most of music business’s top money makers in 2017 had been at it for decades
The New York Post: ‘Stand your ground’ law to protect Florida parking-lot shooter from prosecution The New York Post: ‘Stand your ground’ law to protect Florida parking-lot shooter from prosecution

Leave a Reply

Submit Comment
© 2018 Stock Investors News. All rights reserved. XHTML / CSS Valid.