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Bitcoin held close to a record one day after breaking $ 34,000 for the first time, while Ether, another digital currency, also surged as the cryptocurrency rally continues.
Ether rose as much as 22% to about $ 1,163 after a 30% advance on Sunday. Bitcoin held most of its weekend gains, dropping around 1.6% to $ 33,060 as of 6:53 a.m. Monday in London, according to a price composite compiled by Bloomberg.
“What we are seeing is the standard movement of the cryptocurrency markets from Bitcoin to the Ether-led Altcoin market,” said Vijay Ayyar, head of business development at the Luno crypto exchange in Singapore.
“This rotation generally occurs when Bitcoin has a big rally and investors rotate the gains” in other digital currencies, he said.
Bitcoin eclipsed its 2017 high at the end of last year and only hit $ 20,000 for the first time in mid-December. Proponents of the world’s largest cryptocurrency argue that gold is being leveraged as a hedge against US dollar weakness and inflation risk, citing evidence of growing interest among institutional investors. Skeptics view the over 300% rise in digital assets over the past year as a risky bubble driven by investors chasing the momentum of cryptocurrency prices.
“The drivers of the crypto rally, if anything, are strengthening amid still low interest rates, political uncertainty” and the prospect of more government stimulus, said Julian Emanuel, chief equity and derivatives strategist at BTIG LLC, in a email.
But he added that volatility can work both up “and down.”
