The Rise to $117
The surge began on March 18 when Bitcoin prices opened at $47.37 and hit a trading high of $52.875, before closing the day at $51, a roughly 7.7% increase in a single day of heavy trading. Since then its value has only ballooned further.
As seen in the green-colored graph above, Bitcoin prices have climbed tremendously in the second half of March compared to the flat growth in the first half. The Bitcoin-US dollar exchange rate broke past the $100 level at the end of trading day on April 1, closing at $103 after opening at $92. The following day, it was followed by a more pronounced $14 gain to close the day at $117.
Feverish Trading
Together with its rapid ascent in value, Bitcoin has seen an uptick in trading volumes, as shown in the blue graph. Trading breached the 5,000 volume level ten times over the past two weeks, with two of those instances hitting past the 15,000 volume level. Compare this to the first half of the month where the trading breached the 5,000 volume level just five times, and only once hit past the 15,000 volume level (notably this single instance was on March 12 when the Bitcoin servers suffered a technical malfunction that led to a massive overnight sell-off, but from which the currency quickly recovered.)
Riding on a High
Bitcoin prices appear to be riding on a high of good news and high-profile publicity. On February 28, three weeks before the rally described above began, Mt. Gox and CoinLab unveiled a landmark partnership that is set to bolster their presence in North America, particularly the United States and Canada markets.
The US-based CoinLab is now handling the customer accounts, deposits, withdrawals and other front-end functions for Bitcoin users in both countries, while the Japan-based Mt. Gox continues to provide back-end exchange clearing services and support. By moving the bulk of front-end operations nearer to their location, American and Canadian customers are able to enjoy faster deposit and withdrawal times, and better access to customer service and financial markets.
Meanwhile, in mid-March, during the height of the Cyprus banking crisis, Bitcoin appeared to have become a temporary currency haven for Spaniards who feared that their bank savings were danger of confiscation like those of the Cypriots. Many industry pundits credit the recent surge to this European-led scampering for Bitcoins, using a patchwork of proof, from increased Google searches for "Bitcoin" to a boom in Bitcoin app downloads in the region.
With volatility continuing to hound even the largest currencies like the Euro, more and more people seem willing to back Bitcoin. This improving confidence in the once-niche cryptocurrency alongside a swath of mainstream adoption initiatives - Bitcoin now has a hedge fund and can also be used for purchasing Domino's pizzas - is driving the current price surge.
