Why did cryptocurrency markets suddenly skyrocket?
The price of bitcoin has risen by almost 10 per cent in the last 24 hours, marking a significant change in fortunes for the world’s most valuable cryptocurrency.
Litecoin, ethereum and ripple were among other cryptocurrencies to see major gains, following months of market-wide stagnation.
The sudden market turn-around has led to speculation about what may have caused such gains, with some analysts pointing to bitcoin’s inflated hash rate.
Hash rate measures the amount of power that the bitcoin network is consuming in order to process transactions and generate new units of the cryptocurrency. On Friday, 8 February, bitcoin’s hash rate hit its highest level since November 2018, meaning more miners are joining the network.
The latest gains have seen bitcoin rise by more than $300 to $3,663 at the time of writing, though this still represents a fraction of the $20,000 highs reached in December 2017.
It is unclear whether the price surge is sustainable, though bitcoin’s increased trading volume could be a signifier of more market movement still to come.
Inflation-stricken Venezuela has helped push up bitcoin trading volumes, posting its highest volume to date this week.
The South American country recently pegged its national currency to the government-launched petro cryptocurrency in an effort to prevent economic collapse.