The past week has seen an incredible rebound for bitcoin, as the world’s largest cryptocurrency has regained 30% of its value to lead the market higher.
Bitcoin Price Levels
The cryptocurrency advanced sharply Tuesday, hitting a rally high of $11,770.87. It closed the day at $11,698.86, having gained more than 36% over the past five days. The coin was last seen trading around $11,357 for a market cap of $194 billion. The total capitalization briefly crossed $200 billion on Tuesday.
With the latest rally, bitcoin has taken the global cryptocurrency market past $500 billion. In doing so, it has claimed roughly 39.5% of the total market share, up from a low near 32% in January.
Trade volumes have also risen sharply, and as of Tuesday, nearly $10 billion in bitcoin was transacted on global exchanges. Bitfinex, OKEx and Binance saw the largest percentage of the daily transactions.
The Return of the Bull Market
Bitcoin is benefiting from a myriad of forces that, when combined, point to higher prices for the cryptocurrency. Sentiment has improved markedly after government regulators in the United States and South Korea adopted a friendlier attitudes toward digital assets.
South Korea’s financial regulator recently said the country has no problem with “normal” cryptocurrency trading. The comments mirror earlier statements made by Hong Nam-ki, who heads the Office for Government Policy and Coordination.
“I can assure you that the government has consistently maintained a close and careful approach to market conditions and international trends, keeping all possible means open,” he said in a statement last week.
In the United States, Wyoming recently approved two blockchain bills that could make the state one of the more accepting jurisdictions for cryptocurrency. The first bill, HB 70, defines utility tokens as neither traditional fiat money nor securities, which may give startups more leeway in ICO fundraising. The second bill, HB 19, exempts bitcoin from the 2003 Wyoming Money Transmitter Act.
The Senate has also proposed Bill 111 that would exempt cryptocurrency from taxes. This regulation is intended to boost Wyoming’s digital currency market, which may impact everything from economic growth to job creation. Some analysts have also speculated that the passing of such a bill would set a precedent for other jurisdictions still jostling with formulating cryptocurrency regulation of their own.
As bitcoin climbs above $12,000, investors may feel a greater sense of urgency to enter the market. This so-called “fear of missing out” has been a major driver of cryptocurrencies over the past 12 months.
CNBC “Fast Money” trader Brian Kelly recently recommended to his audience that they purchase March bitcoin futures at $12,000 with a target of $18,000. Based on this recommendation, Kelly anticipates a 50% gain for the cryptocurrency. Futures operated by CBOE and CME Group recently reached their highest levels in three weeks.
Of course, a bull market in bitcoin does not exclude volatility. Bitcoin is expected to remain highly volatile even as capital flows back into the market.