(Bloomberg) — Bitcoin is back over $4100. The leading cryptocurrency rose 1.7 percent to $4254 at 1:34 p.m. in Hong Kong on Tuesday, extending this year’s rally to more than 100 percent.
Crypto bets on higher prices are gaining favor, according to data compiled by Bloomberg from BitMex, one of the biggest bitcoin-only exchanges in the world. The price for a contract that makes money if bitcoin is above $4100 at expiry jumped to as high as 1,276 earlier today, almost double the level it traded at a year ago, data compiled by Bloomberg showed. Contracts betting on a decline back then were averaging about 300, the data show.
“I have been going for higher prices since last summer and that has been a winning strategy so far,” said Arthur Hayes, chief executive officer of BitMEX. “If you cannot handle a 50 percent pullback, then you should not be in the market.”
The price of a single bitcoin has soared more than 400 percent this year, forcing Wall Street banks and asset managers to consider bringing cryptocurrency into their portfolios as they try to ride the wave. Even with Tuesday’s gains, however, digital assets have been extremely volatile. Bitcoin fell 16 percent on Sept. 9 after the U.S. Securities and Exchange Commission delayed a decision on a proposed bitcoin exchange-traded fund, then climbed above $6200 within hours as the regulator signaled support for future investment products tied to cryptocurrencies.
Bitcoin’s total market value is about $102 billion, according to CoinMarketCap, which takes into account the prices of other cryptocurrencies such as ether and ripple. The cryptocurrency remains a favorite among speculators because of its use as a hedge against the traditional financial system, Hayes said.
“Bitcoin is the anti-Fed, so if you’re going to have a long position on things being more difficult for global capital markets, that’s really good news for bitcoin,” Hayes said.