Bitcoin Goes Ballistic After Breaking Through $8,000 Level

(Bloomberg) --

Bitcoin climbed to the highest since November after breaching the $8,000 price level.

Concerns about an escalation in the conflict between the U.S. and Iran are seen as contributing to the rally in Bitcoin, which is not managed by a government.

Bitcoin and gold are well supported due to rising tensions between the U.S. and Iran, said Emmanuel Goh, who runs crypto derivatives tracker Skew. Professional investors are also back from the Christmas break and starting to deploy capital -- this is called the January effect in the stock market.

The worlds largest cryptocurrency rose as much as 7.3% to $8,128 in New York trading, the biggest one-day increase since Dec. 18.

Bloomberg Intelligence strategist Mike McGlone expects Bitcoin to draw support this year because of its fixed supply and greater adoption.

Volatility should continue to decline, as we expect $6,000 to mark this years key support and $10,000 to hold resistance, McGlone wrote in a note Tuesday.

To contact Bloomberg News staff for this story: Olga Kharif in Portland at okharif@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Dave Liedtka, Andrew Dunn

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Bitcoin Goes Ballistic After Breaking Through $8,000 Level