Ripple, the world’s second most valuable cryptocurrency, saw the biggest gains as it surged by 28 per cent to its highest price since mid-November.
Bitcoin’s resurgence has seen it rise by more than $1,000 (£790) in the space of a week, having hit a year low of $3,250 on 17 December.
“What a difference a week makes. Seven days ago things didn’t appear that they could really get much worse for the crypto markets as we crawled towards the end of 2018, looking forward to putting it behind us,” David Thomas, director of a Mayfair-based cryptocurrency broker, told The Independent.
“However, it appears that the ‘Santa rally’ as some have called it, has been well and truly on with a 22 per cent and 71 per cent increase in price for bitcoin and ethereum respectively in the last week.”
The uptick in the cryptocurrency market comes in contrast to the US stock market, with the Dow Jones Industrial Average recording its heaviest seven-day loss since the financial crisis of 2008.
But despite the latest gains, bitcoin is still trading at just a fraction of its 2017 price, which reached close to $20,000 last December. The dramatic decline led to analysts to suggest that last year’s price was the result of an over-inflated bubble.
At less than 10 years old, bitcoin’s price volatility can also be attributed to the nascency of the market, which some cryptocurrency experts claim still holds a lot of potential.
“In terms of the price of bitcoin I think we have neared possible lows after a tumultuous 2018, and we are looking at a strong bull run with ‘herd mentality’ kicking in before the new year like this time last year,” said blockchain adviser Oliver Isaacs.
“Any major new disruptive technology like bitcoin moves with immense volatility due to the thin trading volumes as a result of the fact that there aren’t tens of millions of users in the system yet. What is clear to me is that digital assets are going to survive and be very relevant in a world which is increasingly digital.”
Other industry experts are less optimistic about the cryptocurrency market’s future, with some suggesting that the market is yet to bottom out.
“I don’t think this is the end of a [downward] trend. At least not yet,” said Andrey Alekhin, CEO of blockchain art firm Snark.art.
“As a result of a steady decline in the crypto markets, many blockchain startups have been cutting down their activity or even leaving the market entirely. Startups liquidating their positions in crypto to survive will continue for some time, as will the bear market [in which share prices are falling].”
The Independent
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