The price of bitcoin has surged past $400 for the first time since late September, gaining over 9% today. At press time, the price stood at $400.58.
The last time bitcoin traded north of $400 was on 26th September, following a one-week spike in value. Aside from the BTC-e flash crash in August and a the brief slump in April, likely caused by deposit freezes at Chinese exchanges, the price remained well above $400 for the first nine months of the year.
Black October, encouraging November
October was by far the worst month of the year in terms of price, with a low of $319 on the 5th. The price rebounded and, by 14th October, the CoinDesk Bitcoin Price Index stood at $398. The recovery was short lived, though, and prices tumbled below the $350 mark over the next two weeks.
November started on a low note, with the price hovering in the $320-$325 range for the first few days, before recovering slightly, albeit slowly, on the 9th of November. On that day, the price opened at $344, crossing the $360 mark by the end of the day. Apart from a brief dip yesterday, 11th November, the price has continued climbing, eventually crossing the $400 boundary earlier today.
Time for cautious optimism?
It should be noted that the biggest price rally in bitcoin’s brief history started almost a year ago to the day.
Last November saw the price go from under $300 to over $1000. The spike did not last long, however, and the price started falling in December, followed by a protracted period of extreme volatility. The price saw an unusual period of stability over the summer, trading at well over $500, but by late August had started a long and steady decline.
It's always hard, if not impossible, to pin down the exact cause of price changes. Last year’s rally came just a few weeks after the FBI closed illicit black market Silk Road. While it is possible to argue that the latest rally roughly coincides with the seizure of Silk Road 2.0 and numerous other dark web sites just days ago, it's impossible to correlate the two events for certain.
Other factors suggested by community members include the celebration of ‘Singles Day’ in China, which is known to generate a lot of e-commerce traffic.
Data from Blockchain points to a steady increase in the number of daily transactions, although that change is not followed by a corresponding rise in transaction fees. This, in turn, points to a greater number of non-commercial transactions taking place.