Here we go again.
One of retail traders’ favorite boom-and-bust instruments is back in full bloom boom mode.
And for no good apparent reason.
After flatlining most of September and rising steadily but slowly during October, prices of cryptocurrency Bitcoin have taken off during the first three days of November. In trading early Wednesday (GMT time) Bitcoin prices topped $430, culminating a more than 46% rise in less than a week.
It was just a few days ago when we reported that Bitcoin topped $300.
So what gives?
According to most experts, nothing.
A fairly exhaustive review of recent events in the Bitcoin world by business news site CNBC comes to the conclusion that not much has changed in the past week (or month) which can explain the recent price pop.
Bitcoin price boom, one month. Source: Bitstamp.
About the best explanation given was FOMO – Fear of Missing Out – with mainly retail traders playing a dangerous game of hot potato, riding the bull in a very momentum-driven market.
Another theory being offered is simply: China. Apparently there has been a recent upswing in interest (and demand) for Bitcoin in the world’s most populous country. Everything from the IPO roadshow of Bitcoin Group to the launch of new Bitcoin trading platform Pro Exchange involve China-based or China-focused companies, stoking the flames of Bitcoin in China.
Will the latest climb in Bitcoin prices be another round in the boom-panic-dump cycle we’ve seen several times before for Bitcoin? Or is there a more definitive long term trend happening here, which could see Bitcoin rise even further?