So Much for Stability: Bitcoin Price Soars Another 10% in 5 Hours

For those of us celebrating Bitcoin's hard-earned newfound stability and hard-earned comeback to $300, take your seat belts out of

For those of us celebrating Bitcoin’s newfound stability and hard-earned comeback to $300, take your seat belts out of storage.

In what is unfolding into another speculative frenzy, bitcoin (BTC/USD) has just soared by another 10% in a 5-hour span- its sharpest ascent this year.

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Bitcoin hit $368.74 on Bitstamp, its highest level in nearly 11 months. Bitcoin’s latest milestone is its 52-week return turning positive, which is good news for hedge funds like Pantera when presenting year-over-year returns to clients.

Prices rose as high as $385 in yuan-based trading on Huobi, but only reached $337 on BTC-e. The gap of 13.4% and BTC-e’s widening lag behind its peers are not particularly encouraging signs for what was supposed to be a new era of efficient trading, whose participants would include mainstream investors and institutions.

The latest leg of bitcoin’s rally was particularly turbulent- the cryptocurrency swung lower by nearly 4% within minutes, only to reverse sharply to today’s high.

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Shares of Bitcoin Investment Trust (OTCMKTS: GBTC) closed the day during the rally’s climax. They hit a new 5 1/2-month high of $39.00, implying an underlying bitcoin value of $406, or a premium of 10.3%. After briefly falling below fair value last week, the shares have recovered back into their typical premium range.

Today’s spike continues a trend of correlation with mainstream capital markets. US stocks surged in afternoon trade, simultaneously with bitcoin. Their month-long rally also aligns with that of bitcoin, as did their late August crash.

When bitcoin first broke $300 (only 6 days ago), we assessed that holding ground above the mark for a prolonged period would likely result in a buying spree, especially if it turns positive for 2015 at any given point.

Many traders have also learned that we’re now in November, and November means big moves. November 2013 was the culmination of bitcoin’s historic rise to $1,100, followed by a plunge of 50%. Last year’s edition saw bitcoin spike from $300 to $450, and then fall sharply, surrendering 29% to end the year.

Litecoin (LTC/USD) has joined the party, at least getting a foot in the door. Hanging onto most of last week’s gains, it added 5% during bitcoin’s rally, hitting a high of $3.89 on BTC-e. The LTC/BTC rate fell slightly to 0.0114.

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