Bitcoin surged past the $20,000 barrier and was potentially heading for its best day in six months on Friday as the US dollar fell broadly and markets found reasons to be cheerful at the end of a dour week.
Bitcoin, the biggest cryptocurrency by market value, rose more than 9 per cent to $21,254, a two-week high. If it holds, the daily percentage gain would be the largest since late February.
Ether, the second-biggest, rose more than 5 per cent to hit a three-week peak at $1,746. Bitcoin had been as low as $18,540 on Wednesday.
Market participants said there was no particular trigger for the gains beyond a broad upbeat mood in evidence across asset classes on Friday, led by a drop in the safe-haven dollar and reinforced by positive moves in global shares.
Marcus Sotiriou a market analyst at GlobalBlock attributed Bitcoin’s climb to optimism that the United States could report another decline in inflation next week.
Such a decline would typically be expected to support assets like cryptocurrencies that do well when markets have an optimistic tone.
If cryptocurrencies can hold their gains until Sunday’s close, Bitcoin could log a second weekly rise in a row, and its best week in about a month.
Ether’s weekend volatility may be heightened by a looming software upgrade known as the “merge”, due sometime between Sept. 10 and 20, with the exact timing uncertain.
The shift will radically change how transactions are processed and is supposed to slash energy consumption. Some exchanges plan to pause deposits and withdrawals while the upgrade occurs.