Bitcoin is off to its best start to a year since 2012, gaining about 20% in two weeks amid renewed enthusiasm for cryptocurrencies.
The world’s largest virtual coin rallied after climbing out of the downward price channel it’s been trading in for weeks, rising as much as 5.9% to $8,607, the highest since November. The move upward coincides with the debut of new options linked to the digital currency.
The Bloomberg Galaxy Crypto Index tracking a basket of digital currencies was up about 5.6%. Rival coins including Ether, XRP and Litecoin advanced, with Dash gaining more than 60% in three days.
“The price was slated to move up in general and the CME launch probably added fuel to it,” said Vijay Ayyar, Singapore-based head of business development at crypto exchange Luno, referring to CME Group Inc. beginning to trade options on Bitcoin futures. “Most people think this could be the beginning of a new uptrend.”
The latest rally appears to be a breakout following an extended downturn going back to August. Gains will remain volatile unless Bitcoin is able to breach the $9,500 level, “which would indicate a higher high for the first time,” Ayyar said.
Bitcoin’s almost 20% gain in the first two weeks of the year followed a volatile 2019, in which early optimism from investors over the announcement of Facebook Inc.’s Libra crypto project gave way to skepticism and intense regulatory scrutiny. Bitcoin still almost doubled last year.
The wider industry continues to work toward mainstream adoption while awaiting greater regulatory clarity in markets including the U.S. on issues such as a Bitcoin ETF product. Meanwhile, there is widespread debate whether the upcoming “halving” — a scheduled reduction in the amount of Bitcoin produced in mining to control inflation — will serve as a fresh driver for gains.