Bitcoin has officially crossed $4,000 value boosted by strong Japanese demand.
Bitcoin hit an all-time high of$4,225.40 early Sunday before slightly paring those gains to trade near $4,000, according toCoinDesk.
The digital currency has now quadrupled in 2017, and is up about 40 percent in August alone. It’s market value is now around $64 billion, up about $10 billion in the last week.
The currency trade in Japanese yen accounted for nearly 46 percent of global trade volume, up from about a third a day ago, according to CryptoCompare. US-dollar bitcoin trade accounted for about 25 percent, according to CryptoCompare. The currency trade in Chinese yuan and South Korean won accounted for about 12 percent each.
Analysts have also noted increased investor interest, especially from institutional investors, after the digital currency successfully survived an Aug. 1 split into bitcoin and bitcoin cash.
This week, Fidelity launched a feature allowing customers to also view their Coinbase cryptocurrency holdings. The currency also got a boost from Goldman Sachs, which in a report released this week said it is harder for institutional investors to ignore cryptocurrencies like bitcoin.
Here are some theories as to why we are seeing such an increase:
- It survived a contentious “hard fork” that saw the cryptocurrency split in two, spawning a new digital currency called “bitcoin cash.” But while bitcoin’s value has continued to climb, the latter has floundered.
- It’s acting as a disaster hedge, much like gold, as global geopolitical tensions are ratcheting up. The US and North Korea are currently engaged in verbal jousting, with both sides issuing threats.
- Institutional investors are lining up to get into the cryptocurrency markets. Forbes counted 15 new hedge funds poised to launch this year. Dozens of hedge funds are in the pipeline, according to trade newsletter Hedge Fund Alert(pdf). One partner at an accounting firm said the interest from clients has been “just crazy.”
- Bitcoin continues to go mainstream. Earlier this week mutual funds giant Fidelity released a feature that allows its customers to view their bitcoin, ethereum, or litecoin holdings from within their Fidelity account. Twitter and Square co-founder Jack Dorsey has also talked up bitcoin’s potential as the “the next big unlock” this week.
Bitcoin analyst Burniske has a word of warning for people piling into the currency: The correction could be severe.