The price of bitcoin has surged past $400, gaining over 9% today at press time.
Last time the CoinDesk BPI closed at over $400 was in late September, although the price briefly hit $409 in mid-October.
Black October, encouraging November
Gradually declining from July onwards, bitcoin reached a low of $319 on the 5th October, by far the worst month of the year in terms of price.
By 14th October the price had rebounded, with the CoinDesk BPI hitting $398. The recovery was short lived, however, and prices tumbled below the $350 mark over the next two weeks.
November started on a low note, with the price hovering in the $320-$325 range for the first few days, before recovering slightly, albeit slowly, on the 9th November.
That morning, the price opened at $344, crossing the $360 mark by the day’s close.
Aside from a brief dip yesterday, 11th November, the price has continued climbing, eventually crossing the $400 boundary earlier today.
Time for cautious optimism?
It should be noted that the biggest price rally in bitcoin history – rocketing from under $300 to over $1,000 – started almost exactly a year ago to the day.
This spike did not last long, however, and bitcoin’s value began falling in December, followed by a protracted period of extreme volatility.
It’s always hard, if not impossible, to pin down the exact cause of price changes. Last year’s rally came just a few weeks after the FBI closed illicit black market Silk Road.
While some may argue that the latest rally roughly coincides with the seizure of Silk Road 2.0 and numerous other dark web sites just days ago, it’s impossible to correlate the two events for certain.
Other factors suggested by community members include the celebration of ‘Singles Day’ in China, which is known to generate a lot of e-commerce traffic.
Data from Blockchain points to a steady increase in the number of daily transactions, although that change is not followed by a corresponding rise in transaction fees. This, in turn, points to a greater number of non-commercial transactions taking place.
Correction: A previous version of this article omitted the fact that the price of bitcoin had crossed $400 on the 14th October. This has since been corrected.