Cryptocurrencies In Spotlight On Thanksgiving Splurge

With the fervor surrounding the start of the holiday season, cryptocurrencies are scorching hot. This is especially true as the cryptocurrency market hit $303 billion for the first time according to CoinMarketCap, buoyed by an impressive rally in the two largest digital currencies.

Bitcoin is now just a few percentages away from reaching the five-figure mark of $10,000, jumping to $9,700 at the time of writing while Ethereum spiked to $485, shy of the much-anticipated $500 mark. Notably, bitcoin and Ethereum surged about 27% and 17% from Nov 22.

What’s Behind the Surge?

The strong rally was sparked by increased investor interest around the Thanksgiving holiday and Black Friday shopping. The leading platform for trading bitcoin and rival Ethereum,  Coinbase, added about 100,000 users from Wednesday to Friday. This has almost tripled the number of accounts to 13.1 million over the past year.

A combination of other factors such as soaring demand from institutional investors and the highly anticipated release of bitcoin futures as early as next month added to the strength. The world's largest futures exchange, Chicago Mercantile Exchange (CME - Free Report), is planning to list bitcoin futures in the second week of December while Chicago Board Options Exchange (CBOE - Free Report) is also seeking to launch it by the end of December.

The introduction of bitcoin derivatives will bring a great deal of liquidity and legitimacy to the cryptocurrency ecosystem. It would give investors a way to buy and trade in the digital currency market, which is otherwise not readily available. The derivatives would upgrade the bitcoin status to a more-established asset class. A better and mature regulatory environment will be a huge boon to the digital currency, leading to an increased investment in the booming cryptocurrency, with a growing number of retail investors.

Further, many market watchers are optimistic about the future of the digital currency. Billionaire investor Mike Novogratz predicts Ethereum to hit $500 by the end of the year, while bitcoin will reach $10,000. According to him, investors are pouring into cryptocurrencies due to lack of trust in financial institutions following the 2008 crash.

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Disclosure: contains statements and statistics that have been obtained from sources believed to be reliable but are not guaranteed as to accuracy or completeness. References to any specific ...

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