Bitcoin went up to its highest level after more than a month of being in the downtrend.
Bitcoin was trading at nearly $9,436 as of 4:21 p.m. ET, and jumped to almost 20% over the past week, based on data from Coindesk. The digital currency is recovering from its worst quarter ever where roughly 48% of its value dropped dramatically in just three months.
Spencer Bogart, partner at Blockchain Capital, said bitcoin provides investors with an interesting alternative for selling on macro-economic news this week.
“Bitcoin remains uncorrelated to traditional asset classes, is more than 50 percent off its highs and has significant upside,” said Bogart. “It feels like a no-brainer from a portfolio management perspective to allocate some capital to crypto,” he added.
This week it was reported that Goldman Sachs made its first cryptocurrency hire followed with a Thomson Reuters survey that said one in five firms are considering trading with digital currencies next year. These positive news marked a shift in sentiments towards crypto investment and helped push the prices upwards, explained Joe DiPasquale, BitBull Capital CEO.
“As reports continue to show more and more institutions gearing up to participate in crypto markets, valuations are likely to continue to increase in a steady manner,” DiPasquale said. “There has been a significant shift in sentiment towards the positive, with Bitcoin’s spot price seeing the most notable jump over the last week,” he added.
Tom Lee, Fundstrat’s managing partner and head of research, said the Goldman hire indicates a positive outlook for the future of cryptocurrency.
“It’s a sign that a major investment bank thinks there’s enough clarity, custody and money to be made to actually offer that trading service,” Lee said in an interview on Tuesday. “I think it’s a sign that this is becoming mainstream,” he added.
Based on data from CoinDesk, bitcoin may have recovered from a long downtrend period but it is still down to 30% this year.
The drop in bitcon’s prices in the first three quarters of 2018 was due to investors selling off their coins to meet U.S. tax obligations, regulatory scrutiny and major social networking platforms banning crypto-related advertisements.