Bitcoin jumped 7.6 per cent to $20,404 on Sunday, after slipping to a record low of $17,592.78 on June 18. Ether, the coin linked to the blockchain network Ethereum, rose more than 13% per cent to $1,131 from its previous closing price of $993 on Saturday.
Bitcoin and other cryptocurrencies have suffered massive declines in recent months, owing to several factors, including tighter monetary policy, investors refusal to invest in risky assets, and others.
Andrew Brenner, head of international fixed income at National Alliance Securities, in his analysis of Bitcoin’s value growth, pointed out that the rise in Bitcoin is likely due to retail investors buying up the digital currency over the weekend when few professional traders work.
“Some buyers think now is a good time to get in because Bitcoin got down to a level which shows near-term attractiveness,” Brenner said.
Brenner also warned that Bitcoin and other cryptocurrencies remain extremely volatile, noting that digital currencies are not a good investment at a time when the U.S. Federal Reserve are tightening the supply of dollars by ending expansive monetary policy.
“As long as the dollar continues to show strength, digital currencies is not where you want to be,” Brenner said.