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Bitcoin breaks $8000 level adding to bullish momentum for cryptocurrency

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Bitcoin broke the $8,000 level for the first time in two months Tuesday following weeks of bearish sentiment and a lack of new buyers.

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The world’s largest cryptocurrency surged as high as $8,342.62, and is up more than 7 percent in the last 24 hours, according to industry website CoinDesk, which tracks a number of exchanges. The last time bitcoin traded above that key level was May 23.

The digital currency is up more than 20 percent in the past week, mostly buoyed by reports of institutional investor interest.

“For bulls, this is like fresh air,” said Naeem Aslam, chief market analyst at Think Markets said in a note to clients Tuesday. “The are three major reasons which are driving this move, ETF speculation, more friendly regulatory news and bulls are back in town.”

Last week, BlackRock confirmed it assembled a working group to look into cryptocurrencies and its underlying technology, blockchain. The working group has existed since 2015, a source familiar with the matter told CNBC, but the news still managed to help sentiment for the digital currency.

Billionaire hedge fund manager Steven Cohen’s venture arm, Cohen Private Ventures, invested in the cryptocurrency-focused fund Autonomous Partners, according to a Fortune report published last week.

Speculation that a bitcoin ETF will be approved by the SEC in August has also boosted sentiment in the past month.

In addition, investors are eyeing global regulatory news. South Korea set up a government department last week aimed at creating policy initiatives around financial technology and cryptocurrencies.

“Regulation is moving in apace with positive murmurings from governments as they understand the opportunities and risks. and how to tailor their approaches — South Korea being the latest to give another tacit nod,” Charles Hayter, chief executive of digital coin comparison site CryptoCompare, told CNBC in an email on Tuesday.

Korea blocked anonymous bank accounts from engaging in cryptocurrency trading earlier this year, a move widely seen as positive for the industry.

Hayter also said that initial coin offerings, a controversial form of fundraising for crypto start-ups, are seeing increased accountability and transparency. Financial regulators, including the U.S. Securities and Exchange Commission, have become increasingly wary of ICOs. In an ICO, a start-up sells new digital tokens in exchange for established cryptocurrencies like bitcoin or ethereum — or cash — to kickstart their business.

The phenomenon has been marred by various scams and failed projects, leading to concerns that investors are being defrauded. China and South Korea both banned the controversial practice last year.

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