Bitcoin’s wild price swings resumed after the the world’s largest cryptocurrency climbed above $40,000 for the first time.
After jumping as much as 11 percent to $40,394, Bitcoin fell around $3,500 in about half an hour and continues to fluctuate. Prices vacillated as much as 17 percent on Monday. The digital token has more than doubled in less than a month.
Strategists have cited demand from speculative retail traders, trend-following quant funds, the rich and even institutional investors as among the reasons for the surge. The total market value of cryptocurrencies climbed beyond $1 trillion for the first time Thursday.
“Bitcoin continues to defy all expectations, and doubters,” said Antoni Trenchev, co-founder and managing partner of Nexo, a crypto lender. “It’s leaving all other assets trailing in its wake, like it’s done year in, year out for the past decade.”
Bitcoin accounts for about two-thirds of cryptocurrency market value, followed by Ether at about 13 percent, according to CoinGecko data.
Coinbase Inc., the largest U.S. digital exchange, said it’s experiencing “connectivity issues” on both the website and mobile app for a second day.
Digital coins are jumping in a world awash with fiscal and monetary stimulus, even as some commentators fear an inevitable bust and others question the basic integrity of crypto markets.
Proponents of Bitcoin argue it offers a hedge against dollar weakness and the risk of faster inflation, a bit like gold, while critics decry the intellectual soundness of comparing the two assets.