Bitcoin’s sudden surge propels it above $US5000


Bitcoin climbed suddenly on Tuesday to the highest level since November, leading a broad surge in virtual currencies that brought an end to nearly three months of calm in the $US162 billion ($230 billion) market.

The world’s largest cryptocurrency surged as much as 23 per cent to $US5078.52 as of lunch-time in Hong Kong, according to Bloomberg composite pricing, with traders struggling to immediately pinpoint a reason for the gain.

Market participants say big buy or sell orders in Bitcoin can often lead to outsized moves.Credit:Bloomberg

Rival coins including Ether, Ripple and Litecoin also jumped, as did shares of Asian cryptocurrency-linked stocks including Remixpoint and Monex Group. The value of digital assets tracked by CoinMarketCap.com increased by about $US17 billion in an hour.

While sudden swings in Bitcoin are nothing new, trading in the virtual currency has been unusually subdued this year as investors weighed the prospects for more mainstream adoption after last year’s 74 per cent crash. Market participants say big buy or sell orders in Bitcoin can often lead to outsized moves, in part because volume is spread across dozens of venues. Trend-following individual investors can also exacerbate volatility.

“The Bitcoin market and crypto market in general continues to be small relative to the rest of the markets and emotional,” said Jehan Chu, managing partner at blockchain investment and advisory firm Kenetic Capital. “It’s still very much subject to waves of enthusiasm. I don’t think today is anything special other than a temporary enthusiasm.”

Bloomberg



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