The two things driving Bitcoin’s major recovery

While the rand continues to experience one of its worst weeks of 2018, Bitcoin has seen a remarkable rise in fortune.

The biggest cryptocurrency climbed as much as 5.4% Tuesday to $9,412, the highest it has been since March.

This amounts a 20% gain in the the past week and 37% for the month of April, meaning the cryptocurrency is on track for its best month since its record-breaking December.

“Coming off the back of a period that seemingly focused on claims that we were seeing the bubble finally burst, there is a feeling that markets are seeing a more optimistic tone return for cryptocurrencies,” said IG Group market analyst Joshua Mahony.

“With a host of countries having reviewed what steps to take with respect to targeting the sector, we are now moving into a period that should have greater certainty from a policy standpoint,” he said.

One major factor which helped Bitcoin’s price to rise was the passing of the deadline for the completion of US Federal income tax, which occurred a week ago on 17 April, Mahony said.

“We have seen a circa 16% gain since that date. With substantial tax payments due for such a blockbuster year, there is no doubt that the tax-selling seen in recent months will have played a significant role in dragging crypto prices lower over recent weeks.”

“Given the substantial sell-off we have seen in crypto prices, it would make sense for many large crypto holders to declare their earnings at this current rate to shift assets into a more tax-efficient holding method. The gains we have seen since that tax day point towards a feeling that the shackles have been taken off somewhat.”

The second thing to consider is that Bitcoin was not the only currency which has seen a change in fortune over the time period, said Mahony.

“Looking across the spectrum at some of the altcoin, we are seeing a sharp rise in some of the smaller cryptos as well, with ripple (XRP/USD +88%), bitcoin cash (BCC/USD +93%), ether (ETH/USD +34%) and stellar lumens (XLM/USD +34%) all gaining significant ground over the past week,” he said.

“This rise in altcoins highlights a significant shift in market confidence, which is something that has been missing for some time.”

Read: Bitcoin is surging again

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The two things driving Bitcoin’s major recovery