Bitcoin, the leading digital currency, is having a bit of a resurgence this week. Surpassing $4,000 for the first time in two weeks, this is seen as a breakout from a decline that has been going on for some time now.
According to a report in CNBC, citing CoinDesk, the price of bitcoin gained close to 7 percent in trading on Thursday (Dec. 20) hitting $4,037. CNBC noted that the last time bitcoin traded above $4,000 was Dec. 4. Bitcoin has been plummeting since the middle of last month. Since hitting a record high near $20,000 last December, it has been declining and is now down around 80 percent from that high.
CNBC said it wasn't only bitcoin that was jumping in trading on Thursday. Other major digital tokens were higher, with XRP, the digital token from Ripple, increasing more than 2 percent, while Ethereum was up more than 5 percent. Ethereum and XRP are the other two most valuable cryptocurrencies.
Mati Greenspan, senior market analyst at eToro, said in an email to PYMNTS that the surge in bitcoin and other cryptocurrencies could be driven by Bloomberg, which found Tether has reserves, and an update from ICE that appears to be gearing up to launch bitcoin physical futures on Jan. 24.
"For those wondering why we're seeing this awesome push from the floor, the only explanation I can give is that this rally is all about short covering. Especially after the short squeeze we saw on Monday [Dec. 17], yesterday’s action is simply a continuation of that," Greenspan said. "Markets are made of people, and it's likely that most people will be looking to reduce their exposure before the holidays. Over the last few weeks, there have been a lot of high-leveraged short positions building up, and when those sell positions are closed, it creates upward pressure on market prices.”