After months of immobility and, at least as regards overall coverage, insignificance, it almost sounds like an April Fools’ joke one day late. But it isn’t. Within the space of less than an hour, the price of Bitcoins shot up over 20% against the US Dollar on Tuesday morning and thus for the first time since mid-November at times topped the USD 5,000 mark. Most of the other leading cryptocurrencies likewise posted tangible gains.
In many places, the usual suspects were cited as having triggered the price hike, including fundamental and overall political conditions such as the low interest rates, or the Brexit chaos. Moreover, some pundits pointed out that the structure of the market, with countless trading hubs spread around the globe, can mean that broadly dispersed larger buy requests can lead to greater price fluctuation. Reports of successes made with an upgrade of the Ethereum trading platform also did the rounds. Last but not least, there was speculation that the halving of remuneration for Bitcoin mining in 2020 could in the run-up lead to price rises. Perhaps it was simply that a few (previous) investors regained their courage and after months of consolidation seized the moment to re-enter the market, and thus inject fresh capital into it.
Opinions differ greatly as to how enduring the latest movement will be. While some advocates of cryptocurrencies already see this as the beginning of a new price rally, critics talk of short-term hype with a very limited shelf life. One key precondition for enduring price gains will presumably be that investors are again prepared to shoulder the risk of betting on future price gains on a greater scale, as this would generate increasing demand over a longer period. What can at present be said is only that the cryptocurrency market segment has now shown some signs of life after months of lethargy.