Bears on the retreat as bitcoin soars

Cryptocurrencies extended their rebound on Wednesday as bitcoin traded above US$7 500 for the first time in a month, shrugging off security and regulatory concerns that have plagued the digital currency for much of this year.

Bitcoin climbed as much as 3.1% to $7 543, according to Bloomberg composite pricing. Rival cryptocurrencies including ripple, ether and litecoin also advanced. Bitcoin remains more than 60% below its all-time high in December.

The cryptocurrency last traded above $7 500 on 8 June, before getting caught in a sector wide sell-off that erased about $42-billion of market value the following weekend. Some observers pinned that retreat on an exchange hack in South Korea, while others pointed to lingering concern over a clampdown on trading platforms in China. Cryptocurrency venues have come under growing scrutiny around the world in recent months amid a range of issues including thefts, market manipulation and money laundering.

Advocates of the virtual currency did receive some good news this week, such as word that the CFA Institute, whose gruelling three-level program has helped train more than 150 000 financial professionals, is adding topics on cryptocurrencies and blockchain to its curriculum for the first time next year.

A technical gauge followed by bitcoin traders, the Directional Movement Index, also just crossed into its first positive divergence since April. The last time it flashed this signal, the cryptocurrency rallied about 20% over the next three weeks.

Some bitcoin bulls had also attributed recent gains to a report on Sunday that BlackRock formed a team to investigate ways of taking advantage of cryptocurrencies and blockchain, the computer code that underpins them. But Larry Fink, CEO of the world’s largest asset manager, threw some cold water on that speculation on Monday.

“I don’t believe any client has sought out crypto exposure,” Fink said in an interview on Bloomberg Television. “I’ve not heard from one client who says, ‘I need to be in this.’”  — Reported by Olga Kharif and Eric Lam, (c) 2018 Bloomberg LP