Bitcoin breached the $20,000 mark and was heading for potentially its best day in six months on Friday, as the US dollar fell broadly and markets found reason to be cheerful at the end of a austere week.
Bitcoin, the largest cryptocurrency by market value, rose more than 9% to $21,254, a two-week high. If that holds, the daily percentage gain would be the largest since late February.
Ether, the second largest, rose more than 5% to hit a three-week high at $1,746. Bitcoin was as low as $18,540 on Wednesday.
Market participants said there was no particular trigger for the gains beyond a broadly bullish mood across all asset classes on Friday, driven by a decline in the safe-haven dollar and bolstered by moves positive global equities.
Marcus Sotiriou, market analyst at GlobalBlock, attributed Bitcoin’s rise to optimism that the United States could signal another drop in inflation next week.
Such a drop should generally support assets such as cryptocurrencies that do well when markets have an optimistic tone.
If cryptocurrencies can hold onto their gains through Sunday’s close, Bitcoin could post a second straight weekly rise and its best week in about a month.
Ether’s weekend volatility may be heightened by an impending software update known as the “merger”, scheduled between September 10-20, with the exact timing uncertain.
The change will drastically change the way transactions are processed and is supposed to significantly reduce power consumption. Some exchanges plan to suspend deposits and withdrawals during the upgrade.