Big ups and downs! Bitcoin rose above $9,000 and then fell by $1,100

After rising above $9,000, Bitcoin fell back by more than $500, and some blockchain concept stocks fell.

Data from the Bitstamp platform showed that Bitcoin fell sharply, hitting the $8,000 mark, down nearly $1,100 from its intraday high of $9,096, and a 24-hour drop of 7.5%. Blockchain concept stock Riot Blockchain closed down 8%.

Bitcoin has been rising rapidly in May, with a cumulative increase of nearly 70%. So far this year, Bitcoin has risen by as much as 140%, becoming the best performing asset in the world.

Manuel Ernesto De Luque Muntaner, founder and CEO of Block Asset Management, a fund that invests in blockchain and digital currencies, told the Financial Times that winter is over and demand from institutional investors and venture capital funds has fueled the digital currency's gains this year.

Naeem Aslam, chief market analyst at ThinkMarkets, said that Bitcoin will rise above the $10,000 mark in the next two weeks, recovering half of its losses from its historical high.

In addition, Facebook is currently building a payment system based on digital currency. If this project, code-named "Project Libra", is successful, it will likely overturn traditional e-commerce and become the largest mainstream digital currency application to date; in addition, Fidelity Investments began to provide Bitcoin custody services at the beginning of this year, and it is rumored that it will launch Bitcoin trading services.

A previous article from Wall Street Journal also pointed out that more than 20% of institutional investors already own digital assets. A recent Fidelity survey showed that nearly half of institutional investors believe that digital assets can play a role in their portfolios, while 22% of institutional investors already own some form of digital currency.

In addition, the timing of this round of price increases coincides with the results of some EU parliamentary election polls, which show that populism and extremism prevail. However, Zerohedge commented that there is no sign of buying pressure coming from this, and it is more likely that investors' safe-haven demand has driven the demand for virtual currencies amid trade tensions.

In fact, digital currency prices still have a long way to go before they can return to their peak levels. Take Bitcoin as an example, the current price is still 53% lower than the record of nearly $20,000 set in December 2017.

It’s also important to note that many investors still remember the collapse of previous digital currencies, and not everyone believes that these virtual currencies will be widely accepted.

Bloomberg Intelligence analyst Mike McGlone wrote in a report: There are signs that this round of rebound is too violent. For example, the volume of digital currency transactions has not been able to match this wave of gains, which shows that a more cautious attitude towards the rise of digital currencies is needed:

“This is just the thawing of the previous winter. There may be another correction before we really get a handle on the fundamentals and weed out the speculators and the fraud.”