The possibility of bitcoin’s legitimacy is back on the table after the original crypto coin surged past $A11,500 this week, its highest level since July.
It had reached lofty heights by December 2017 when it was worth more than $28,000, but a sharp drop at the end of that month and then a loss last year of 74 per cent led many to doubt its long-term prospects.
The rally this week has caught many who invest in the space off guard because there is no fundamental explanation for hitting a 10-month high on Tuesday morning.
But there is an ongoing blockchain and cryptocurrency conference in New York called Consensus, with big investors and influential market players gathered to network and discuss the state of the industry.
Bitcoin also rallied during previous Consensus conferences.
It peaked at $11,742, rising more than 30 per cent since Friday.
Some analysts pointed out that bitcoin’s rally coincided with the escalating trade war between the United States and China, which eroded overall market risk sentiment.
But it is too soon to declare bitcoin as a safe-haven asset, they said.
Fred Schebesta, co-founder of Sydney over-the-counter cryptocurrency trading desk HiveEx and who is currently speaking at the Consensus conference, said the “crypto winter” was finally over.
“This space isn’t going anywhere. Confidence is slowly returning to the market,” he said.
“But we need more real world adoption for cryptocurrency to be widely used.”
David Thomas, of London-based cryptocurrency broker GlobalBlock, said the breaching of a key $US6000 ($A8660) support level last week fuelled interest among investors.
In addition, Lukman Otunuga, research analyst at FXTM, said the bullish “golden cross” was already in play on the daily charts.
This occurs when the 50-day simple moving average has crossed above the 200-day moving average.
Other market participants said perceptions of bitcoin’s resilience in the wake of last week’s $US40 million theft from the major Binance exchange was supporting sentiment.
Cryptocurrency markets have previously fallen after high-profile security breaches.
Bitcoin has almost doubled in price this year, underscoring its volatility after a bruising 2018.
Last year it lost some three-quarters of its value amid tighter regulation across the world.
But so far on the year, bitcoin has been up a sparking 119 per cent.