Rumors of bitcoin’s demise were greatly exaggerated.
Only weeks after JPMorgan Chase head honcho Jamie Dimon called the cryptocurrency a “fraud,” helping to send it crashing to below $3,000, bitcoin is racing upwards once again — surging 9 percent in the last day to smash its previous all-time high of about $5,000.
By early Thursday morning, a single bitcoin was worth more than $5,250.
(For those still wondering what the hell bitcoin is: it’s a virtual currency that’s traded on a decentralized ledger known as the “blockchain,” which safeguards against government or institutional tinkering. All transactions are verified by bitcoin “miners” and added to the public ledger.)
There are a few factors that could have spurred bitcoin’s latest run: Former hedge fund manager Michael Novogratz told CNBC on Wednesday he could see it hitting $10,000 within the next year; China is likely softening its stance on trading virtual currencies (something that added to bitcoin’s swoon in September); and Wall Street has shown increasing interest in bitcoin as a store of value, with Goldman CEO Lloyd Blankfein tweeting last week he’s “thinking” about recommending it to investors.
It’s a stark contrast to where bitcoin found itself a month ago. Dimon lambasted the technology, saying “it will blow up,” and “someone is going to get killed” investing in it (sounds dramatic).
Coupled with China outlawing bitcoin exchanges, the price plunged in mid-September more than 25 percent. Bitcoin is notoriously volatile, however, shrugging off the dip to hit new highs.
Another factor in bitcoin’s run has been President Trump’s quick trigger threats to foreign adversaries — leading to less confidence in traditional currencies like the U.S. dollar — according to investment manager Ross Gerber.
“There’s no basis for the value of bitcoin, other than uncertainty about our future,” Gerber told TheWrap. “That’s why bitcoin has gone up so much — because of Trump. The U.S. system has never been more at more risk to damage, and that’s why bitcoin has been successful so far.”
Moving forward, bitcoin could have another catalyst on the horizon. A potential “fork” at the end of October, breaking off an off-shoot cryptocurrency called “bitcoin gold,” could spur the original bitcoin even higher. This was already the case with a fork earlier this year.