Investing.com - Bitcoin rallied for an eighth-consecutive day on Wednesday, extending a rally of over 240% this year and erasing much of what it lost in 2018.
Bitcoin jumped 11.1% to $12,721.1 on the Investing.com Index by 9:13 AM ET (13:13 GMT).
Though still far from all-time highs of nearly $20,000, bitcoin came within a stone’s throw of $13,000 overnight. An additional climb to $13,850.4 would bring it back to where it was in early January 2018.
The fact that LedgerX won regulatory approval late Tuesday for a bitcoin futures contract that will be settled in bitcoin, rather than cash, was added to the list of bullish factors that analysts say has reignited interest in the sector.
The green light from the Commodity Futures Trading Commission means that the cryptocurrency exchange is cleared to offer institutional and retail investors futures, options and swaps. That will represent another step on the way to broader acceptance by the investing public.
Investing.com analyst Pinchas Cohen highlighted the recent news flow that has accompanied the nearly 50% surge seen this month: “mounting expectations around Facebook’s Libra, which could turn crypto markets mainstream; financial crackdowns in India and China, which are driving people to move into the unregulated digital currency market; and—first and foremost—the expected ‘halvening’ of mining rewards in 2020.”
The latter factor refers to a process in digital currencies that slows the pace at which new digital coins are created. A halvening has also been credited with Litecoin’s 360% jump this year.
In bitcoin’s case, the rewards miners receive for every new block of code mined stands at 12.5, but will be halved to 6.25 in May 2020. Halvening is a routine process meant to control inflation that is programmed to happen roughly every four years for bitcoin. Halvening tilts the supply/demand balance and consequently the price of an asset if demand remains constant.
Despite the recent run of bullish news, analysts are cautious of an imminent correction, given the nearly $5,000 jump in prices in just over two weeks.
Critics also remain wary that 2019’s bull run could be a precursor to a repeat of the plunge that wiped out nearly $17,000 off bitcoin’s price after it touched its record high in December 2017.
Investing.com analyst Clement Thibault gave evidence to show that the current rally was different, but still warned investors to “look out for another parabolic ride higher and lower."
Cryptocurrencies overall traded higher Tuesday, with the total coin market capitalization of $365.56 billion, compared to $345.07 billion a day earlier.
Among bitcoin’s closest rivals, Ethereum gained 5.7% to $332.02, XRP advanced 0.8% to $0.47352, Bitcoin Cash traded up 1.7% to $488.89, while Litecoin slipped 0.2% at $135.179.