Bitcoin has shot up in value by more than $1,000 in a bizarre price spike for the cryptocurrency.
The volatile virtual currency rose from below $7,000 to briefly reach above $8,000 in an unprecedented surge that follows several months of steady decline.
It is not yet clear what has caused the value to increase by such a large amount, with some analysts speculating that breaking the $7,000 price point sparked a surge in bitcoin investment.
“Today’s rise doesn’t appear to be driven by any significant news stories,” Ed Cooper, head of mobile at fintech startup Revolut, told The Independent.
“Most likely there was a change in sentiment today and traders started to buy thus raising the price.”
The price gains represent a 12 per cent increase since this time yesterday and a 14 per cent increase week-on-week. In the last year, bitcoin has risen by over 500 per cent in value.
At the time of writing, bitcoin was trading at around $7,700 on the Coinbase exchange.
In recent weeks, bitcoin has slowly fallen in value amid fears that the highs seen in late 2017 were the result of a bubble.
At its peak last December, one bitcoin was worth close to $20,000.
Other leading cryptocurrencies have mirrored bitcoin’s return to form, with ethereum, ripple, bitcoin cash and EOS all experiencing gains of more than 10 per cent over the last 24 hours.
Cryptocurrency analysts recently suggested that bitcoin’s recent demise was only temporary, predicting a turn in fortunes for the world’s most valuable cryptocurrency.
Speaking to The Independent earlier this month, one expert said the price of bitcoin could return to its 2017 highs and even push beyond.
“The price has been driven by speculators and they suddenly got cold feet but there’s considerable effort going on behind the scenes, including new underlying technology that is powering faster transactions,” said Michael Jackson, the former COO of Skype who now works in the cryptocurrency space.
“Meanwhile, regulators seem open-minded and are now working to eliminate the risks for consumers. So I see no reason why bitcoin shouldn’t’t fulfil its dream. And if it does then recent price falls will appear trivial.”
This forecast comes in contrast to comments from economists at Barclay’s bank this week, which labelled bitcoin’s 2017 price rise an “infection” that spread like a disease.
Such analysis would suggest that the falling price meant the disease had been treated and gains of that scale would not be seen again.
“We developed a theoretical model of an asset price with a pool of speculative investors and compared it with actual bitcoin price behaviour to see what it might imply for the future dynamics,” the economists said.
“The model has clear parallels with compartmental models of the spread of an infectious disease in epidemiology.”
The most recent price rise suggests the infection has not been fully treated, with some analysts predicting even greater gains in the future. The most optimistic forecasts put bitcoin’s future price at $1 million within the next three years.
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