Last Wednesday we reported that bitcoin had risen to $6,000 for the first time this year. On Monday, just five days later, bitcoin reached a new 2019 high of $8,000. As I write this, one bitcoin is worth about $7,900.
Of course, bitcoin reached much higher levels in late 2017 and early 2018. Bitcoin’s current price just under $8,000 is less than half the all-time high of $19,500 set in December 2017. Bitcoin was last worth at least $8,000 in July 2018.
As often happens, bitcoin’s rise is part of a broader cryptocurrency boom. On Saturday, the price of ether—the currency of the Ethereum network—rose above $200 for the first time in 2019. Other cryptocurrencies, including Litecoin, Bitcoin Cash, Monero, and Dash are at or near 2019 highs.
Still, bitcoin has outpaced all of these alternative cryptocurrencies in recent weeks. Bitcoin’s price has doubled just since late March.
I wrote last week that there was no clear explanation for bitcoin’s sudden popularity with investors. That largely continues to be true today.
One recent piece of bullish news came from Bakkt, a digital asset exchange that shares a parent company with the New York Stock Exchange. Bakkt announced on Monday that it would begin user acceptance testing for bitcoin futures contracts in July.
It’s a step toward greater mainstream acceptance of the currency and could generate additional demand for bitcoin. But it’s hard to believe that this factor accounted for very much of the last week’s big price gains.
There are also some signs of increasing bitcoin purchases from large institutional investors. That may be contributing to bitcoin’s price rise, but it’s not clear why these buyers are suddenly interested in bitcoin.
While bitcoin’s price has been rising at a rapid pace in recent days, it has yet to reach the fever pitch of late 2017. In one 48-hour period days before the December 2017 peak, Bitcoin rose from $12,000 to $15,000 in less than 48 hours. A few days later, bitcoin hit its all-time record price of $19,500, then crashed—the start of a year-long slump that brought the price below $4,000 by December 2018.