Buy the crash still seems to be the watchword for bitcoin traders.
The cryptocurrency threatened to top $8,000 for the first time Friday as it neared the end of a wild week that saw more wild swings for cryptocurrencies in general. Bitcoin itself is up 17% this week and has more than bounced back from a wipeout earlier this month following the suspension of a software upgrade known as Segwit2X. That selloff saw bitcoin lose more than 25% of its value over four days.
“Major fundamental concerns remain as to the efficacy of bitcoin but for now price remains in a strong uptrend and many observers experiencing FOMO (fear of missing out) are looking at any drops as buying opportunities,” said David Cheetham, chief market analyst at XTB Limited, in a note.
One bitcoin BTCUSD, +0.07% fetched $7,912.91, according to digital currency site CoinDesk.com, a rise of 0.9%, after hitting an all-time high of $7,998.40 earlier in the day. Year-to-date, bitcoin is up more than 700%.
The earlier bitcoin retreat came after a group proposing to launch a faster version of the digital currency suspend their plans due to opposition by other developers. The change would have approximately doubled the processing capacity of the underlying network. The change to the blockchain—the digital distributed ledger software that underpins all cryptocurrencies—would have resulted in two versions of bitcoin, with holders of the original due to receive an equal amount of the alternative. In the run-up to the scheduled launch, speculators had purchased bitcoin in anticipation of the split.
Market observers said renewed expectations that developers would go ahead with the upgrade might have prompted renewed buying interest in bitcoin.
BCH refers to an alternative version of the cryptocurrency known as Bitcoin Cash, which previously rose sharply as bitcoin prices tumbled.
Meanwhile, bitcoin previously steadied after CME Group Inc. CME, +0.51% the world’s largest exchange operator, said it planned to launch futures trading in the cryptocurrency as soon as next month. Rival CBOE Futures Exchange plans to offer futures by early 2018.
The prospect of a futures market has encouraged bulls who see it as potentially fostering more institutional interest in cryptocurrencies, but it also alarms some in the financial community, where skepticism runs high.
Thomas Peterffy, one of the world’s most successful derivative traders and chairman of Interactive Brokers LLC, this week took out an ad in The Wall Street Journal to draw attention to a letter he penned to the Commodity Futures Trading Commission. Peterffy argued that bitcoin’s volatility would be impossible to determine margin requirements for sellers and expressing concern that exchanges would offer low margins to entice buyers.
See: Wall Street pioneer takes out ad in WSJ to warn of bitcoin trading perils
Wall Street heavyweights and others, meanwhile, have argued that price action in bitcoin and other cryptocurrencies almost certainly reflect market bubbles. J.P. Morgan Chase & Co. JPM, +0.20% Chief Executive Jamie Dimon has compared bitcoin to the tulip mania of the 17th century, declaring bitcoin “a fraud.”
See: A list of what Wall Street CEOs have said about bitcoin
Yale economics professor and Nobel Prize winner Robert Shiller, whose book “Irrational Exuberance” was an examination of market manias, told Quartz in September that bitcoin was the “best example” right now of a market bubble.
Others are more circumspect. Goldman Sachs Group GS, -0.02% Chief Executive Lloyd Blankfein this month told CNBC bitcoin might be “a kind of bubble,” but also wondered if it was part of a “natural progression from hard money to fiat money to consensus money.