Bitcoin climbed to a fresh 2019 high, approaching the $6,000 level for the first time since November on most cryptocurrency exchanges.
The largest digital coin advanced as much as 4.7 percent to $5,961, according to Bloomberg composite pricing. Most of the other highly-traded tokens also pushed higher.
The world’s most-followed cryptocurrency has been drawing attention from technical analysts and conventional investment firms as it claws its way back from last year’s 74 percent plunge that took it below $4,000. It has surged more than 50 percent in 2019.
“Bitcoin is testing new near-term highs because the overall institutional involvement is becoming stronger and stronger,” Jehan Chu, managing partner at Kenetic Capital, said by phone from Hong Kong. “We’re just seeing institution after institution lining up to the thesis of digital currency, and Bitcoin is the standard bearer.”
Fidelity Investments, which began a custody service to store Bitcoin earlier this year, plans to buy and sell it for institutional customers within a few weeks, according to a person familiar with the matter.
“Fidelity alone doesn’t move the entire needle, but Fidelity with E*Trade and Ameritrade and Robin Hood and a whole host,” said Chu, whose firm is a blockchain investment and advisory company. “You’re seeing a critical mass of these types of asset managers and brokers providing retail exposure and retail access to crypto.”
Some investors who expect Bitcoin to break above $6,000 see it quickly finding a new resistance level. The token will likely find fresh headwinds in the $6,000-$6,500 range, said Charlie Morris, a fund manager and founder of cryptocurrency price discovery site ByteTree.com in London.
“It would be unsurprising if that former support became resistance -- something that is quite normal in markets,” Morris said.
The crypto market, however, is not normal in the sense of having uniform pricing or ease of arbitrage, as are some of the securities exchanges that handle the biggest conventional assets, like blue-chip stocks or benchmark sovereign bonds.
On Bitfinex, for example, one of the larger crypto exchanges, Bitcoin is being quoted at a premium of about $350 to Bloomberg composite prices. In fact, it has traded above the $6,000 level on Bitfinex since May 3.
The platform is subject to speculation that investors are paying extra because they’re desperate to exiting the Tether stablecoin on Bitfinex. Several affiliated companies which control both the exchange and the stablecoin are under investigation by New York officials for allegedly engaging in a cover-up to hide hundreds of millions in losses, casting a shadow over the pledge that each Tether is worth $1.
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