Bitcoin broke the price barrier of $5,000 for the first time on Thursday, marking an increase in value of as much as eight percent daily, driven by investors dismissing the latest warnings about trading in the cryptocurrency market. According to Reuters, the most well-known cryptocurrency, Bitcoin, has recorded a value increase five times this year.
Bitcoin has been around for nine years and remains very volatile and illiquid compared to traditional assets and currencies, and the reason for the increase in value is still not fully known.
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Goldman Sachs’ announcements that they are considering introducing trading in this currency, rumors that China might ease restrictions, and even the political crisis in Spain are some of the reasons for the increase in value according to some analysts.
However, the main factor could simply lie in the fact that investors want to stay in tune with market trends, and the cryptocurrency market has delivered higher returns than any other currency.
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Vladimir Putin has warned of serious risks in this market, and the Russian central bank has announced that it will ban trading in cryptocurrencies. However, even that was not enough to deter investors.
According to data released last week, it is evident that all news related to cryptocurrencies, whether positive or negative, drives demand, despite the fact that bad news can temporarily have a negative effect.
Other cryptocurrencies, whose prices tend to have a positive correlation with Bitcoin’s price, have also increased in value, now totaling more than $160 billion. The upcoming split, which could create rival clones in the cryptocurrency market, is seen by some as a reason for the price increase.
