The bitcoin price has jumped nearly 12% after four days of consecutive gains, hitting a high of $262.81 in today’s trading so far, according to the CoinDesk Bitcoin Price Index.
The price spike comes on the back of a relatively robust week of trading for the bitcoin price that was peppered with positive news for the digital currency.
News of the Bitcoin Investment Trust gaining regulatory approval for a public market listing in the United States broke yesterday, giving bitcoin bulls reason for cheer. The fund plans to make its shares available for trade on a US ‘over-the-counter’ market, potentially bringing increased liquidity into the bitcoin markets.
Bitcoin Investment Trust gets official OK to trade on public markets: http://t.co/u2TtnWDnVn — fantastic news for the whole ecosystem
— Tuur Demeester (@TuurDemeester) March 1, 2015
The rally started on Friday, when the bitcoin price jumped $20 in an hour, hitting a high of $257.50. The $20 spike represented a gain of about 8% from opening prices at the time.
Earlier gains were supported by news events earlier in the week that included the Bank of England talking up digital currency’s potential to “revolutionise” payments. Researchers at another central bank, the Boston Federal Reserve, echoed this sentiment in an interview with CoinDesk.
The positive remarks from central banks were accompanied by significant merchant adoption moves from RE/MAX, a global property network, and T-Mobile in Poland. The Japanese e-commerce giant Rakuten also recently signalled that it could begin taking bitcoin payments in the future.
Market watchers are cautiously optimistic that the breakout could signal greater gains to come.
Timo Schlaefer, co-founder of new derivatives exchange Crypto Facilities, said:
“Looking at the chart, there is upside potential. There was little movement lately, and then such a spike draws lots of attention, possibly inducing more buys.”
However, Schlaefer sounded a guarded note about the price spike, pointing out that it hadn’t quite bucked the bitcoin price’s overall downtrend.
Backdrop of steady decline
The bitcoin price has declined steadily since last June, with a sharp crash at the start of the year that took the price from just above $300 to a low of $170, before rebounding to current levels.
“I think we’d need to get above $400 for some time to consider the current downtrend ended,” Schlaefer said.
Trading data on major exchanges showed OKCoin and Bitfinex leading the rally Friday, with an increase in volume at 3:38am on both platforms, according to data from Cryptowatch. Bitstamp followed suit three minutes later, as did the Coinbase exchange.
Sentiment on Bitfinex is in favour of further price gains, with long swaps taking up 63% of newly opened swaps at its peak, at 5:00am Friday.
Cryptocurrency pundits on r/BitcoinMarkets attributed the price jump to the end of the Spring Festival break in China, a weeklong holiday that’s gained global significance as the world’s largest annual human migration, as workers return to their hometowns to celebrate. The holiday officially ended on Wednesday.
Other market watchers thought the spate of good news was behind the breakout. Mike Rymanov, who runs the DSX exchange in London, said the Bank of England’s bullish views towards blockchain technology could have rallied the market.
“Announcements such as the BOE one certainly give a great deal of credibility to the blockchain technology and bitcoin, being the best manifestation, gets to benefit,” he said.