Bitcoin rallies 10%, extending this week’s gains after months of crypto carnage

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In this photo illustration the digital Cryptocurrency, Bitcoin is seen on August 13 2018 in Hong Kong, Hong Kong. 

Bitcoin is finally rallying again.

After weeks of pain for the world’s largest cryptocurrency, bitcoin surged 10 percent to a high of $3,929.10, according to data from CoinDesk. Wednesday’s performance brings bitcoin’s three-day gains to more than 22 percent.

Other top cryptocurrencies followed suit. XRP, the world’s second largest digital currency, jumped 16 percent while ether rallied 13 percent, according to CoinDesk.

Still, 2018 has been a brutal year for most cryptocurrency investors. Bitcoin is down more than 80 percent from its all-time high hit almost exactly one year ago. This year alone, it’s down 72 percent and has struggled to usher in new buyers.

Finding fresh buyers was hardly a problem last year.

Bitcoin first became a household name in 2017 as retail investors made speculative bets on cryptocurrencies, raising money through initial coin offerings, or ICOs. Regulators have stepped up their oversight of the industry this year, cracking down on fundraising projects that have failed to register with the SEC. Other crypto founders have been charged as outright frauds.

Mati Greenspan, Senior Market Analyst at eToro, said bitcoin’s “impressive push from the floor” on Wednesday was the result of short covering.

“People are looking to reduce their exposure and closing out high risk sell positions before the holidays and this is creating upward pressure on market prices, which is ultimately resulting in a rally,” Greenspan said.