U.S. Markets open in 6 hrs 39 mins

Bitcoin surges 7% as it eyes $13,000

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
Jewelry with the Bitcoin logo is seen on display at the Consensus 2018 blockchain technology conference in New York City, New York, U.S., May 16, 2018. Photo: Mike Segar/ Reuters

The price of bitcoin continues to climb higher, with the cryptocurrency spiking 7% against the dollar on Wednesday morning.

At 8.45am UK time, Bitcoin is up 7.1% against the dollar to $12,583.66 (BTC-USD) and up 7.5% against the pound to £9,967.56. Earlier in the session bitcoin came close to breaking through $13,000.

The price rise extends bitcoin’s recent rally, which has seen it climb over 200% against the dollar so far this year and over 50% this month.

Connor Campbell, a financial analyst at SpreadEx, said bitcoin had been “immensely aided by the launch of Facebook’s Libra, which appears to have renewed interest in the product and acted as further legitimisation of the market.”

Last week Facebook and a consortium of other major tech and payment players launched their own cryptocurrency, Libra. The cryptocurrency, set to launch next year, aims to help the world’s estimated 1.7 billion unbanked people access financial services.

Other analysts said bitcoin’s recent rise was down to recent signs from central banks around the world that they would cut interest rates. The prospect of lower interest means investors are hunting for yield elsewhere.

“The liquidity injection from central banks has forced a range of assets like gold, bonds, the yen etc, so bitcoin is just being swept along by those macro currents,” Neil Wilson, the senior market analyst at Markets.com, said.

“Obviously recent dovishness from central banks has seen investors look towards alternative currencies, but perhaps Facebook’s unveiling of its Libra currency has seen investors look again at cryptocurrencies with fresh eyes,” Deutsche Bank strategists wrote in a note on Wednesday.

“Whatever the cause, the momentum is powerful right now,” Wilson said.

Bitcoin’s rise contrasts with the wider market, which is largely in the red on Wednesday morning. The one notable exception is ethereum, which is up 4.1% against the dollar to $329.50 (ETH-USD) and up 4.3% against the pound to £261.20 (ETH-GBP).

————

Oscar Williams-Grut covers banking, fintech, and finance for Yahoo Finance UK. Follow him on Twitter at @OscarWGrut.

Read more: