Just in case you had any doubt, Thursday’s trading underscored that bitcoin needs China more than the other way about.
The leading cryptocurrency denomination leapt more than 9 percent Thursday and easily crossed the $5,000 threshold for the first time, trading near $5,300 by mid-afternoon in New York.
The buying was driven in part by rising hopes that China will soon reverse a recently imposed ban on crypto trading. In the meantime, buying from South Korea, Japan, and other countries has helped bolster demand and push the market to new highs, according to the widely followed site CoinDesk.
In many ways, Thursday’s gains neatly encapsulated the bitcoin market in general. As bitcoin jumped more than 20 percent this month alone and quintupled so far in 2017, it has attracted more and more speculators placing bets based on hunches and rumors.
For both better and worse, bitcoin has also been highly sensitive along the way to demand in emerging economies, especially China. The ban there pushed the cryptocurrency to lows under $3,000 in September, but now even the potential for renewed Chinese participation is enough to push bitcoin to a new record as well.
Several other factors have also worked in bitcoin’s favor the last few weeks. Among them:
- Russian President Vladimir Putin has called for improved regulation of bitcoin trading but stopped short of calling for an outright ban in his country along the lines of China.
- Goldman Sachs is reportedly planning to launch a bitcoin trading desk soon, according to a Wall Street Journal report on Oct. 2. Traditional banks have mostly been wary of bitcoin until now, but it’s definitely caught their attention as a potential profit center.
- In remarks last month, J.P. Morgan Chase CEO Jamie Dimon called bitcoin a “fraud” and likened it to an infamous seventeenth-century financial bubble that drove tulip bulb prices up in Europe.
On an earnings call of his own yesterday, Dimon was asked again about bitcoin. He replied: “I’m not going to talk about bitcoin anymore.”