Bitcoin’s sudden price rise has resulted in gains across cryptocurrency markets, with ethereum, ripple and litecoin all surging in value.
Within the space of an hour on Thursday, 12 April, bitcoin rose by more than $1,000 - breaking above $8,000 for the first time since March.
The movement’s of the world’s most valuable cryptocurrency is usually reflected across other virtual currencies, and this unprecedented spike was no exception.
Ethereum, which boasts a market cap of around $45 billion, shot up in price by 10 per cent, taking it close to $500. At its peak in January, one ether was worth more than $1,300.
Similar percentage gains were experienced by ripple, which has the third highest market cap behind bitcoin and ethereum.
The altcoin EOS saw the largest gains out of all the top five most-valuable cryptocurrencies, rising by over 30 per cent to take its market cap above $7 billion.
The market-wide shift follows several months of steadily sliding prices for bitcoin, which peaked at nearly $20,000 in December 2017.
Dramatic market movements are not unusual for the notoriously volatile cryptocurrency, which can often be triggered by positive or negative news surrounding regulation and laws.
The latest surge does not appear to be related to any significant news within the cryptocurrency space, however, with some analysts suggesting the gains come from a change in sentiment amongst investors.
“In this scenario traders with short positions will start to lose money and liquidate their positions by buying bitcoin,” Ed Cooper, head of mobile at fintech startup Revolut, told The Independent.
“This causes the price to rise further and as more people start to notice the rise they buy in for a quick gain. This continues the cycle.”
Despite the gains, Cooper advised investors to be cautious about betting on a positive direction of the market beyond the short term.
“We’d need to see a sustained rise over a number of weeks to signal the end of the bear market,” Cooper said. “We’re definitely not there yet.”
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