“With news around structured products, derivatives, and major institutional capital looking at the most liquid and established asset on the horizon,” he said, “I remain extremely bullish on bitcoin and think we have significant further upside potential.”
That said, few exchanges initially supported the offshoot bitcoin cash. The digital currency traded Thursday around $300, still a fraction of the original bitcoin’s price.
Digital currency market watchers like Michael Novogratz, former macro hedge fund manager at Fortress Investment, have also cautioned that bitcoin shows signs of forming a bubble.
But Novogratz said Tuesday on CNBC’s “Fast Money” that increased interest from investors will likely send bitcoin several thousand dollars higher to above $10,000 in the next six to 10 months. Novogratz himself is also launching a $500 million fund to invest in digital assets, which would be the largest of its kind.
Financial research firm Autonomous Next estimates about 75 such “crytpo-funds” now exist.
“We think cryptocurrencies are suitable tools for diversifying portfolios. And lots of trading firms are waking up to this fact,” said Nick Kirk, quantitative developer and data scientist at Cypher Capital, a cyrptocurrency trading firm.
Other news Thursday added to positive sentiment on bitcoin.
A major U.S. digital currency exchange, Coinbase, announced Thursday it is rolling out instant bitcoin, ethereum and litecoin purchases of up to $25,000 from U.S. bank accounts. Previously, customers using their bank accounts to buy the digital currencies had to wait several days to receive them.
JPMorgan Chase Chairman and CEO Jamie Dimon also said during a conference call with media Thursday he is “not going to talk about bitcoin anymore,” after calling it a “fraud” in September. The bank’s chief financial officer, Marianne Lake, added that JPMorgan is “open-minded” about digital currencies that are properly regulated.
Bitcoin climbed 11 percent to a record high of $5,386.23 Thursday, according to CoinDesk.
Heavy buying from Asian investors has also supported bitcoin’s price gains. Demand for bitcoin in Japanese yen accounted for nearly 60 percent of trading volume Thursday, according to data from industry website CryptoCompare. South Korean won-denominated bitcoin trading accounted for 8 percent of volume, while U.S. dollar-bitcoin trade accounted for about 26 percent, data on the website showed.
Even the Chinese yuan held about 1.5 percent of bitcoin trading volume, despite the closing of many Chinese digital currency exchanges last month due to pressure from the government.
A widely circulated commentary piece from China’s state-backed news agency Xinhua last week also raised the possibility of China allowing bitcoin exchanges to operate under licenses.