The flagship cryptocurrency jumped by more than 6 percent in value as it nudged close to its best level since November 28. As of 14:30 GMT, bitcoin was trading at $3,403.03 and was up 6.07 percent, according to Coindesk. The surge saw bitcoin claw back losses recorded last week after BTC was dragged below $3,200. Bitcoin has fallen around 80 percent from its record high last December, with BTC tumbling nearly 50 percent in the last three months alone.
The value of bitcoin peaked at almost £15592.50 ($20,000) this time last year.
Stephen Innes, head of Asia Pacific trading at Oanda, said the future of bitcoin might not stay so positive, despite today’s gains.
He told Market Watch website: “Looking at the hand that is dealt, we should expect crypto markets to trade lower until ultimately investors can justify and determine valuations.
“But even from a cross-asset play with global markets veering south the fact investors can’t pin an intrinsic value on BTC, in my view makes it even less appealing.”
But some fans remain adamant bitcoin will continue on an upward trend.
Stephen Pair, chief executive of bitcoin payments processor BitPay, told Forbes: “I used to say 10 years.
“Now I think it’s more like three to five years until you can go into a restaurant, a retail establishment, and everybody’s going to expect that that store will be able to accept a blockchain payment.”
Thomas Lee, head of research at Fundstrat Global Advisors had in May predicted a crypto rally to $25,000 (£19,901) by the end of 2018.
His explanation for the divergence include 2017’s explosive rally, a “meltdown” in the macroeconomic climate and treasury sales during initial coin offerings.
He said: “Fair value is significantly higher than the current price of Bitcoin.
“In fact, working backwards, to solve for the current price of Bitcoin, this implies crypto wallets should fall to £13,533million from £39,800milliion currently.”
Traders are attributing the bitcoin rally to heavy buying on Japan and Hong Kong-based exchanges.
Last week saw the Financial Services Agency in Japan publish a report of recommendations of the digital currency sector following the hack of two major Japanese exchanges, Coincheck and Zaif.
While in Hong Kong, the Securities and Futures Commission announced it will clamp down on digital coins to combat concerns over fraud and money laundering.
As bitcoin declined in value, other cryptocurrencies including ethereum and bitcoin cash followed suit, experiencing gains against the USD.
Ethereum was trading at $89.13, up 4.87 percent, while bitcoin cash was worth $87.46, an increase of 7.06 percent.