The price of Bitcoin has broken through $8,000, doubling its value in 2019

On Tuesday, Bitcoin’s price broke through the $8,000 mark, continuing the cryptocurrency’s value doubling trend since the beginning of this year.

According to data from the CoinDesk website, Bitcoin once surged past $8,325 before giving up some gains. Since the start of this year, Bitcoin’s price has risen by more than 120%.

Bitcoin’s price has yet to recover to its all-time high of about $20,000 reached at the end of 2017, when a frenzy of retail investor interest suddenly drove the cryptocurrency’s value sharply upward.

Andy Brenner from National Alliance Securities said that although it is impossible to identify the direct driving force behind Bitcoin purchases, it seems logical that Chinese investors are using digital currency as a means of diversification.

In an email to CNBC on Monday, he said, “We can see that the recent surge in Bitcoin coincides with a sharp decline in the RMB against the US dollar.”

Iqbal V. Gandham, Managing Director of eToro UK, told CNBC in a phone interview on Tuesday, “Negative news no longer has a negative impact.”

Gandham said that Bitcoin’s price has now reached a baseline, and individual events such as Samsung and HTC phones supporting Bitcoin, and Amazon’s marketplace accepting digital currencies, are beginning to influence consumer acceptance.

He added that rumors about Fidelity Investments, one of the world’s largest asset management companies, soon starting cryptocurrency trading services for institutional clients have also had a positive effect on the price.

Meanwhile, cryptocurrency critic David Gerard attributed Bitcoin’s recent rise to the trading behavior of large digital currency holders exerting pressure on short sellers.

In a blog post on Monday, Gerard explained that “whales” are buying into the market until short positions are forced to close. During liquidations, shorts buy back at market prices, while a wave of buy orders hits the order book, causing prices to soar.

Gerard said that the whales who drive the price up then sell to take profits.

The cryptocurrency expert also linked the rise in Bitcoin to the influx of a US dollar alternative token called “Tether.” These tokens are reportedly introduced into the digital market to inject liquidity. The owners and operators of Tether are the same company as the cryptocurrency exchange Bitfinex.

However, there are significant questions about how Tether’s value is truly pegged to actual US dollars, and Bitfinex is currently under investigation by the New York Attorney General’s office.

Gerard stated that although there are serious doubts about the legitimacy of the recent buying spree, he expects Bitcoin and other cryptocurrencies to continue rising.

Mainstream media coverage may attract new “fools” with real money (rather than just Tether). I had predicted another mainstream cryptocurrency bubble would occur — but didn’t expect it to come so quickly.