Overnight the Bitcoin price continued its recovery and climbed over 8% to as high as US$3,969 as traders looked beyond a series of negative developments and returned in their droves.
At the time of writing the Bitcoin price is fetching US$3,945.33, according to CoinDesk. This means the cryptocurrency has almost quadrupled in value since the start of the year.
Why did the Bitcoin price climb higher overnight?
While there doesn't appear to be a single catalyst for the move higher, it appears as though traders are increasingly of the opinion that a crackdown by Chinese regulators will not hinder the rise of Bitcoin.
According to CNBC, Bitcoin expert William Mougayar believes that the market overreacted to the China news and remains confident that the long-term fundamentals are unchanged.
Is the Bitcoin price heading to US$5,000?
Considering that the Chinese crackdown and talk of Bitcoin being a bubble and a fraud by leading industry figures hasn't put off traders, then I think there is every chance we will see the cryptocurrency break through the US$5,000 mark in the near future.
And while there are reasonably sound arguments for Bitcoin's inclusion in a balanced portfolio, I'm not convinced that the risk/reward on offer here is sufficient enough to warrant an investment.
In light of this, I will continue to watch on from the safety of the sidelines and invest in some of the quality tech shares that are listed on the Australian share market instead.
