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Bitcoin on new upward march, climbs 12% in New York on Thursday

New York

BITCOIN'S back. At least for one day.

The biggest cryptocurrency climbed 12 per cent as of 5 pm in New York, piercing both the US$7,000 and the US$8,000 levels in less than an hour early in the trading day, leaving investors guessing as to what the catalyst was.

Bitcoin had swung wildly between gains and losses in December, and hit a record high of almost US$20,000 before crashing.

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Thomas Lee, head of research of Fundstrat Global Advisors, cited a combination of Santander's plan for a blockchain-based payment application, tax-related selling almost over and speculative short investors being squeezed out of the market for the surge.

Some backers of the digital token said the bearishness may be fading after the recent swoon that drove the price down more than 60 per cent in a few months.

Jeffrey Van de Leemput, an analyst at Cryptocampus, a business that offers trading courses, said via e-mail: "Serious money is now entering the market for the first time. A couple days ago I helped set up a 200k btc transaction for Chinese buyers. ... Soros etc are coming in, we will now see the start of the real bubble."

George Soros, the billionaire investor who called cryptocurrencies a bubble in January, was said last week to have authorised his US$26 billion family office to trade digital assets.

The spike caused shortsellers to close positions, "spurring a waterfall of 'buy' orders", said Miguel Schweizer of cryptocurrency hedge fund Quantia Capital.

Bears had amassed record shorts of more than 38,000 Bitcoin on trading platform Bitfinex, according to data compiled by TradingView. Short positions plunged to about 25,000 Bitcoin on Thursday.

Evercore ISI's Rich Ross said in a report on Thursday that Bitcoin looks attractive after its jump: "As much as it pains me to say this, the chart does look a lot like other high-flying stocks that I am buying on this dip." BLOOMBERG

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