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Bitcoin Surges Back Above $11,000, Cryptos Breathe Sigh of Relief

Published 07/03/2019, 09:50 PM
Updated 07/04/2019, 12:44 AM
© Reuters.

© Reuters.

Investing.com - Bitcoin surged higher on Wednesday in a second day of gains, prompting speculation that the recent correction may have run its course.

Bitcoin jumped 6.75% to $11,272.4 on the Investing.com Index by 12:38 PM ET (16:38 GMT).

The typically volatile digital asset has seen a rollercoaster ride since mid-June that took it from $7,888 to a 2019 high of $13,929.8 just one week ago, with gains mostly attributed to Facebook’s announcement of its own cryptocurrency known as Libra, which it plans to launch in 2020.

Amid concerns that the more-than-200% surge so far this year was far too reminiscent of the frenzy that took it to all-time highs of nearly $20,000 before it crashed to $3,000, analysts became cautious and warned of an imminent correction.

That correction appeared to rear its head last Thursday as bitcoin plunged nearly 14% and the largest crypto by market capitalization began a retracement that took it as far as $9,728.5 on Tuesday, a 30% plunge.

The panic caused a Forbes contributor to claim that the “bitcoin bubble bursts” and Nouriel Roubini, chief executive of Roubini Macro Associates, to repeat his long-term stance that there was “still a long way to less than zero as its true value is negative, not zero”.

The potential for recovery seen a day earlier, although perhaps just a break in the downward trend before further losses, appeared to send a sigh of relief through the sector on Wednesday.

Cryptocurrencies overall traded higher on Wednesday. The total cryptocurrency market capitalization rose to $325.27 billion, compared to $312.02 billion a day earlier.

Among bitcoin’s closest rivals, Ethereum rose 4.8% to $293.86, XRP advanced 2.1% to $0.39838, Litecoin increased 3.4% at $119.853, while Bitcoin Cash traded up 3.9% to $408.37.

Among news regarding the sector as a whole, the Cuban government said late Tuesday it was studying the potential use of cryptocurrency as part of a series of measures to boost its economy amid a deepening crisis exacerbated by U.S. sanctions.

British regulator the Financial Conduct Authority proposed Wednesday the banning of the sale of derivatives based on crypto-assets to retail consumers from early 2020 due to what it considers the prevalence of market abuses.

The FCA noted that prices of crypto-assets - which include currencies like bitcoin as well as tokens representing other tradeable assets - are very volatile and there is a lack of a clear investment need for products referencing them.

-- Reuters contributed to this report.

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