WATCH: What is a bitcoin?
Bitcoin (BTC-USD) has resumed its upward march after the cryptocurrency fell earlier this week, with analysts expecting it could skyrocket to record gains.
It was (BTC-USD) trading up 3.7% on Thursday at around 3.35pm in London, around $39,889 (£29,160).
The digital currency hit an all-time high of more than $40,000 last week before dropping to around $35,500 a few days ago.
Despite the extreme volatility, analysts say investor appetite for it isn’t waning anytime soon.
“Life has come back for Bitcoin as the crypto king’s performance has been attractive once again,” said Naeem Aslam, chief market analyst at AvaTrade. “It seems like the pain is over for Bitcoin, and there may not be any period of consolidation as Bitcoin has started to march towards all time high once again.
He added that as long as the price stays above the 50, 100, and 200-day simple moving averages, “the chances are that we will see higher highs for the Bitcoin price.”
Craig Erlam, senior market analyst at Oanda Europe, is even more bullish.
“The moves earlier this week was not the bubble bursting, it was barely a correction by bitcoin’s own standards,” he said. “It was a reminder of the downside risks in the space. There will be plenty more bad days ahead but as we’re seeing now, bitcoin bulls are not deterred and we could see more significant gains in the very near future. We could see an interesting psychological test around $50,000 which, the way this now moves, may not be far away.”
Despite the enthusiasm, authorities are increasingly warning the public about the digital currency’s safety as an investment vehicle.
On Wednesday, European Central Bank president Christine Lagarde called on global regulation of the digital asset, highlighting that it has been used for money laundering activities in some instances and that any loopholes need to be closed.
“(Bitcoin) is a highly speculative asset, which has conducted some funny business and some interesting and totally reprehensible money laundering activity,” Lagarde said in an interview at the Reuters Next conference.
The UK’s Financial Conduct Authority has also warned consumers of the risks from investments advertising high returns based on crypto-assets.