Bitcoin has experienced a resurgence, with the cryptocurrency soaring over $5,000 to a record high of $6,638.00 on Tuesday morning.
The price surged more than $600 from Monday, according to CoinDesk, a currency market data service, when bitcoin trading was suspended in China due to a dispute over a cryptocurrency called Dogecoin.
That prompted many of the cryptocurrency’s major exchanges to halt trading and users to turn to other services to buy and sell the digital currency.
The rise has led to a boom in the number of bitcoin wallets and trading platforms, with many more companies making their way to the market.
This is not the first time bitcoin has risen in value in 2017.
In March, the cryptocurrency briefly overtook the US dollar to become the second-biggest global currency, after the Chinese yuan.
However, the rise in value was driven by a surge in the price of ether, the second biggest cryptocurrency, which jumped to $1,000 a coin on Tuesday, according the website CryptoCompare.
That was the biggest jump in value on record, after China’s People’s Bank of China raised its benchmark interest rate to 6 percent.
This week, the US Securities and Exchange Commission (SEC) announced that the Bitcoin Exchange Commission will issue regulations for trading cryptocurrencies, and the bitcoin exchange operator Coinbase is expected to be approved for listing on the New York Stock Exchange next month.
While the value of bitcoin is growing, the bitcoin network is struggling to handle the surge in trading volumes.
A major bitcoin mining operation has been shut down after the cryptocurrency lost a significant amount of hashpower over the last few days.
As a result, miners have had to temporarily suspend mining until they can get more power back on, which may cause a further drop in bitcoin’s price.
“The market is seeing an unprecedented amount of activity,” says David DeSilva, co-founder of BitInstant, a bitcoin mining and trading platform.
“This is a huge risk for bitcoin.”
Bitcoin’s current price of $7,000 is just a few percentage points above its all-time high of over $6.7 million on January 15, 2017.
However it remains a volatile asset, with bitcoin losing around 5 percent of its value in the last month.
Bitcoin is still the second most popular cryptocurrency after the US Dollar, after ether, but it is expected that the value will fall as a result of the increased demand for digital currencies.
“As bitcoin becomes more popular, we see more and more people turning to the digital currencies as an alternative to fiat currencies,” DeSilvas said.
“For example, many are buying bitcoins as an investment or store of value.
But it’s still too early to tell whether this trend will continue.”
The price of bitcoin has been on a rollercoaster ride in 2017, with its rise followed by its fall, which is why DeSilas believes it is likely to remain volatile for the foreseeable future.
“We are seeing the market become more and bigger as more people turn to digital currencies for their wealth management and to buy things,” he said.
“Bitcoin is not necessarily a bubble.
But I do think it will continue to rise.”
DeSilvas says that the price will be driven by supply and demand, with more people coming to bitcoin because of its increasing popularity and as it is easier for people to access it.
“It’s a good time for bitcoin to go higher because of all the news about cryptocurrencies,” he added.
“There is a lot of demand.
The supply of bitcoin right now is limited by the amount of mining power.
This will change as more and better miners join the market.”
De Silvas says he expects bitcoin to be able to continue to climb for the next year or so, but that the supply will continue its fall.
“You have to think long-term,” he explained.
“Bitcoin has been a bubble for so long, and we are not there yet.”