“The largest cryptocurrency rose as high as $9,142.80 on Tuesday, a level last seen early November. Other coins rallied as well, with the Bloomberg Galaxy Crypto Index gaining as much as 1.7% to more than a two-month high.
“The increases come after last week’s poor performance in the run up to Lunar New Year celebrations, which some participants expected to trigger a slowdown in trading.
“Potential explanations for the rally include Bitcoin’s potential new safe-haven status amid risk-off moves fueled by the spread of the virus. JPMorgan Chase & Co.’s Nikolaos Panigirtzoglou last week said that options on the cryptocurrency are ‘off to a decent start.’
“’Some hedge funds who do not necessarily have a fundamental view on Bitcoin direction could see opportunities in trading volatility,’ Panigirtzoglou wrote in a note Friday. ‘The CME’s reputation and credibility in U.S. derivatives markets more broadly could be a substantial advantage in attracting those potential market participants.’
“Nomura Securities International’s Charlie McElligott in a note Monday pointed to U.S. five-year real yields at the most negative since April 2017 ‘acting as a major bullish catalyst for gold and Bitcoin.’
“Of course, Bitcoin is also famously volatile, having gone parabolic in late 2017 to reach about $19,000, before tumbling back over the course of the next year. It had quite a ride even in 2019, having started the year just above $3,000 and spiking to nearly $14,000 in June before ending December at $7,158…”