Bitcoin Surges To About $8,700 But Can It Sustain the Rally?

Bitcoin’s (BTC) value has been steadily rising since April and the cryptocurrency is now valued at about US$8,700, although there is no clear trigger for the rally. Bitcoin started the year at just $3,800, which means its value has risen more than a 100 percent year-till-date.

Bitcoin's rise has come as a relief for the past couple of years to investors, as cryptocurrencies have faced a slump with investors deserting it because of scams and huge losses. Even governments has taken a tough stance against cryptocurrencies and bankers have called for better regulation.

However, 2019 looks promising for cryptocurrencies, especially BTC as it stays strongly in the market and draws more investors and enthusiasts. ProChain Capital president David Tawil applauded the upward trend of Bitcoin. At the same time, he expressed concerns about the vulnerability of the cryptocurrency to a sudden drop. “An investor would rather see a gradual rise with constant floors in terms of downside being established, as opposed to a very, very quick run-up.”

Analysts are still trying to figure out what exactly triggered the surge in Bitcoin. Bloomberg had last month called it an ‘April Fools joke’. A fake report on April Fools' Day had said that the SEC had approved a bitcoin-based exchange trade fund.

Forbes reported that the price surge, which started in May, followed reports from Adamant Capital and Delphi Digital that the bitcoin price had likely reached its bottom for the current market cycle.

In May, 2018, the director at GP Bullhound, Sebastian Markowsky had said that institutional investors are likely to enter the market and push the price of cryptocurrencies higher. He had said growth dynamics for precious few survivors of the crypto-winter will be unprecedented.

Charlie Hayter, the CEO of CryptoCompare, had told CNBC in last year that four factors play a role in the cryptocurrencies market. It includes regulation, arrival of institutional money, various types and varieties of instruments and increasing interconnectedness of markets.

Followed by Ethereum and Ripple, Bitcoin remains to be the biggest by market capitalization. A recent report said nearly two-thirds of crypto investors polled believe Bitcoin’s rally hasn’t yet run out of steam, and could rise closer and closer to the $9,600 mark.