Small investors are piling back into the cryptocurrency market, helping drive prices higher even as traders face uncertainty over proposed tax regulations in Washington.
Cryptocurrencies such as bitcoin, ether, dogecoin and other altcoins have rebounded in recent weeks from their midyear pullback, returning to levels not seen in months. Bitcoin on Friday traded at $47,544, its highest close since May 15, giving it a 64% gain for the year. Rival currency ether is up 344% for the year, while dogecoin—the joke cryptocurrency beloved by retail investors—traded at 28 cents, up more than 5,500% for the year.
Behind the recent moves, data show, is a resurgence in interest from individual investors, who have waded back in after cryptocurrencies received a jolt of momentum in late July. At the time, Tesla Inc. Chief Executive Elon Musk said while speaking at “The B Word” conference co-hosted by the Crypto Council for Innovation that he and his rocket company, SpaceX, held bitcoin. An Amazon.com Inc. job posting that same week for an expert in digital currency and blockchain created further buzz.
Around that time, spot trading volume of cryptocurrencies including bitcoin and ether increased sharply on major exchanges including Binance, Kraken, Coinbase Global Inc. and Gemini Trust Co., according to data compiled by Coin Metrics, a cryptocurrency data