Bitcoin hit another record high on Friday, continuing the rally seen in the previous day amid renewed bullish sentiment from investors.
The price of the cryptocurrency hit an all-time high of $5,856.10 in the early hours of Friday morning, according to data from industry website CoinDesk. But profit taking from investors saw the bitcoin price fall as low as $5,396 in the following hours.
Its market capitalization — the total value of all bitcoin in circulation — hit $97 billion. Bitcoin is up over 480 percent year-to-date.
The catalyst for the rally, which began on Thursday, was speculation that China could reverse a recent ban it put on exchanges. Last month, regulators banned cryptocurrency exchanges with some of the largest in the country shutting down operations. Reversing this would bring the world’s second-largest economy back online.
Experts also said that a major upcoming change could also be getting investors excited. Earlier this year, bitcoin split, and a new cryptocurrency called bitcoin cash was created. Another so-called “fork” is on the way, and this will create “bitcoin gold”. Holders of bitcoin will automatically receive bitcoin gold, which is essentially “free money.”
Longer term trends have also helped bitcoin’s price. Favorable regulation from the likes of Japan, which has allowed retailers to accept bitcoin for payment if they want, has supported bitcoin. Also, Goldman Sachs is considering the launch of a new trading operation focused on digital currencies. Some investors feel this is a sign that larger players could enter the market.
Top figures in the business world are also beginning to discuss cryptocurrencies. IMF (International Monetary Fund) Managing Director Christine Lagarde told CNBC on Thursday, that there could be “massive disruptions” from digital currencies.
But bitcoin is still facing strong criticism from countries and business leaders.
Russian President Vladimir Putin said on Tuesday that “buyers of cryptocurrencies could be involved in unlawful activities,” according to a Reuters report. Russia’s central bank also said it would block websites of exchanges that are offering cryptocurrencies.
JPMorgan Chase CEO Jamie Dimon recently called bitcoin a “fraud” but has since vowed to stop talking about it due to the negative reactions he received.