Another day, another monster run for bitcoin traders.
Bitcoin was trading at around $US240 in the beginning of October. Now — after a gain of 10% on Tuesday added to its earlier run, its closer to $US400.
Now, bitcoin traders are looking for answers as to why the cryptocurrency is skyrocketing in value.
“You’re seeing more and more institutional investors moving into the space,” said Brendan O’Connor, CEO of Genesis Global Trading, a bitcoin broker.
Some of the demand has been coming from China. O’Connor said the daily volume of bitcoin trades coming from China has been two- to three-times the ordinary amount over the last two weeks.
It’s not just the value of bitcoin that’s increasing, it’s also the prevalence of use.
The number of daily bitcoin transactions appears to be steadily rising, according to tracking site Coinbase. And that has the potential to have a tremendous impact on the cryptocurrency.
“We are seeing unprecedented volume globally,” said Michael Sonneshein from Grayscale Investments, which manages the Bitcoin Investment Trust, a publicly listed vehicle that tracks bitcoin. Bitcoin Investment Trust hasn’t been public very long — but it enjoyed a run-up of more than 7% on the good news Tuesday.
Neither O’Connor or Sonneshein centered on a single factor that is boosting bitcoin’s value. Sonneshein pointed out that as bitcoin auctions run by the US Marshals draw closer (only in a handful of instances), the cryptocurrency tends to see increased trading activity.
The next government auction of seized bitcoin is November 5.
Here’s the graph tracking bitcoin:
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