The price of bitcoin reached above $7,700 on Monday, according to CoinMarketCap, up by almost $2,000 since the end of June. Its current value is still a long way off its 2017 peak, when it reached close to $20,000 amid a flurry of interest in the virtual currency.
The latest gains also fall short of some analysts’ predictions, who forecast that bitcoin would rise above $10,000 in May and continue to climb. They have also not been reflected across all cryptocurrency markets, with ethereum seeing its value drop by around 3 per cent since this time last week.
It is the first time since April that bitcoin has achieved consistent price gains, helped by two major price surges last week that saw its value go up by over $1,000 in just a few days.
Analysts often attribute positive news in the crypotcurrency space to positive price movement, and the latest market shift is no exception. Rumours that the investment giant BlackRock is interested in cryptocurrency preceded one price spike, marking the latest firm from the traditional financial sector to potentially make a move into the space.
A major announcement by the US Securities and Exchange Commission (SEC) could also see the price of bitcoin significantly shift either up or down.
Some within the cryptocurrency space are hopeful the SEC will introduce a bitcoin exchange-traded fund (ETF), which was requested by the blockchain platform SolidX through the Chicago Board of Exchange.
If introduced, bitcoin’s price could be propelled towards its 2017 highs thanks to increased trust through clearer regulation. An ETF for gold that was introduced 15 years ago saw the commodity shoot up in price by around 300 per cent.
The SEC may reject the ETF, however, having previously dismissed a request last year citing bitcoin’s price volatility.
Whether or not the request is rejected is unlikely to stem a recent trend that has seen governments and financial authorities seek to better understand the digital currency space.
“Almost every moth there’s new evidence to suggest that authorities are finally getting to grips with the crypto markets – and recent weeks have really seen things accelerate,” Matthew Newton from the eToro trading platform told The Independent.
“Stateside, the Federal Reserve Bank of St Louis, which has historically been friendlier to crypto than other US banking authorities, added bitcoin, bitcoin cash, ethereum and litecoin to its FRED index. And in Europe, the publication of a new paper from the European Parliament edged closer to giving cryptocurrencies the stamp of approval.”
The report also warned that any move by a major bank or financial institution could have a negative impact on bitcoin, stating: “The arrival of permissioned cryptocurrencies promoted by banks, even by central banks, will reshape the current competition level in the cryptocurrency market, broadening the number of competitors.”
Bitcoin’s dominance as the world’s leading cryptocurrency could also be challenged by startups in the space, such as the Goldman Sachs-backed Circle, which is planning to launch a digital currency tied to the US Dollar later this year.