Cryptocurrency markets are showing the first signs of recovery after months of stagnation, with the price of bitcoin breaking above $4,000 (£3,000) on Monday.
Bitcoin has been trading between $3,000 and $4,000 since November 2018, having fallen from a peak of around $20,000 in late 2017. The latest price of $4,050 is just $100 shy of bitcoin’s highest value this year, which it hit in February.
The mini-surge comes as cryptocurrency luminaries predict bitcoin will see significant gains in the coming months. They include the Winklevoss twins, who used their settlement with Facebook to found the Gemini cryptocurrency exchange.
At the South by Southwest conference in Texas, the twins once again reiterated their conviction that cryptocurrency will one day be bigger than Facebook and even replace gold as a store of value.
“The only thing that’s truly precious, in my mind, is bitcoin,” Cameron Winklevoss told the audience. “[If] you talk to someone who’s playing Fortniteand say, okay, two options, bar of gold or the equivalent in bitcoin, they are 10 times out of 10, 100 times out of 100, going to take the bitcoin. They want software, they don’t want hardware.”
Brendan Blumer, who co-founded the blockchain firm Block.One, also took to Twitter over the weekend to predict that bitcoin will replace gold by 2040
Over the next two decades, #bitcoin will replace #gold as the leading commodity to store value,” he tweeted.
Other notable tech figures who have recently endorsed bitcoin include Twitter CEO Jack Dorsey, who revealed he is stockpiling $10,000 of the cryptocurrency every week.
Cryptocurrency analysts said the latest price breakthrough is encouraging but warned investors to be cautious.
“The bitcoin bulls have finally managed to break through the psychological $4,000 mark – but let’s not get too carried away, as it’s what happens next that matters,” Simon Peters, a market analyst at the online trading platform eToro, told The Independent.
“For me, the question is whether bitcoin can keep the momentum from here and overcome its recent struggle for direction.”
According to Mr Peters, the real test for bitcoin will be at the $4,200 price point, which bitcoin is yet to break through this year.
“If we see bitcoin going above $4,200 and convincingly staying above that level, that’s when we can talk about a more significant bearish-to-bullish trend,” he said.