The price of bitcoin surged 17% on Tuesday and briefly touched $5,000, its highest price since November 2018. And bitcoin’s bump carried other cryptocurrencies higher as well.
There was not a single clear reason for the spike apart from improving sentiment.
Bitcoin had been stuck between $3,500 and $3,800 for three months, but once it broke through the $4,000 wall, the bulls came out in force. Bitcoin volume on the Binance exchange hit an all-time high on Tuesday—buying begetting more buying.
Tom Lee, an analyst with Fundstrat, sees “increasing evidence the worst is behind for crypto,” he wrote in a research note on Tuesday. “Skeptics are on the wrong side of history.”
Reuters also points to a single “mystery order” for $100 million worth of bitcoin, spread across multiple exchanges including Coinbase and Kraken, identified by U.K. crypto broker BCB Group.
The bitcoin hike sent almost all the other large-cap cryptocurrencies higher, a reminder that bitcoin is “the alpha and the omega,” as CoinDesk research director Nolan Bauerle said at Yahoo Finance’s All Markets Summit: Crypto last year.
As the popular Twitter crypto commentator @WhalePanda remarked, “Only thing that really matters for alts [“altcoins,” or smaller-cap cryptocurrencies] is the BTC price.”
Besides general positive sentiment, there are a few additional recent events in the bitcoin universe that could be helping the price.
Lightning Network, an off-chain rail for crypto payments, has gained big momentum in 2019 and recently hit $5 million in capacity. Square and Twitter CEO Jack Dorsey participated in a “pass the torch” game on Twitter using Lightning, and has been publicly advocating for bitcoin at Square.
In addition, while everyone in crypto awaits the approval of a bitcoin exchange-traded fund, a similar product pegged to the price of XRP launched on Switzerland’s SIX exchange this week.
And in February, JPMorgan Chase rolled out JPM Coin, an institutional token JPM will use to move value among its clients. Despite the fact that the token will be for internal use only, some still saw the move as a sign that banks are preparing to more fully embrace crypto.
If bitcoin can continue its momentum above $5,000, the bulls could drive it even higher. On the other hand, skeptics can certainly point to a number of negative recent events for bitcoin, like Cboe halting its bitcoin futures contracts just 15 months after first launching them.
Daniel Roberts covers bitcoin and blockchain at Yahoo Finance. Follow him on Twitter at @readDanwrite.