If you haven’t heard, bitcoin is back. Well sort of. The best-known cryptocurrency is on a relentless run and bottom pickers may have finally struck gold.
After climbing as much as 20% on April 2, bitcoin and other digital asset prices have not just held, but extended their gains, raising the question: has something fundamentally changed in the digital currency landscape?
“Prices may be rising, but it’s hardly the whole story,” said Dave Balter, chief executive of Flipside Crypto. “Maybe more significant, the fundamentals of crypto projects — their customer acquisition and retention, their product developer capabilities — have been on the rise through all of 2018 and continue to grow at a significant enough pace to determine these are real businesses with real outcomes ahead of them.”
Some of the most promising projects center around fixing one of bitcoin’s biggest shortcomings, scalability, or the capacity of blockchains to process cryptocurrency transactions efficiently and quickly. The much-hyped Lightning Network, the second-layer system that sits on top of the bitcoin blockchain, has garnered support from projects that are assisting the network in achieving its goal of scaling.
On April 3, one day after the initial crypto rally, developer Pierre Rochard announced the release of the Lightning Power Users app, which aims to boosts the network’s inbound capacity, the ability for merchants to receive payments more easily.
Today, the bitcoin network can process around 5 transactions per second, while payment networks like Visa and Mastercard can process more than 5,000 per second.
Some observers say the rebound has been accompanied by a shift in investor behavior. “We have seen a lot of interest in people buying and holding of late,” said Lennon Sweeting, director and head trader at Coinsquare Capital Markets Ltd. “In Q4  a lot of people were dumping assets and liquidating their holdings, that has definitely shifted this year.”
Year-to-date bitcoin has rallied more than 50%, trading above $5,300 on Monday for the first time since November 2018, and a number of its counterparts have gained as much 150% including Litecoin, which has risen 177% and Bitcoin Cash that has added 165%.
Still, cryptocurrencies have a long way to go to repair damage done in 2018. Bitcoin is still down more than 70% from its all-time high near $20,000 and the market value of all coins is more than $500 billion from its peak.
But for now, with each day bringing with it a fresh multimonth high for bitcoin (the cryptocurrency has logged gains in 10 of the last 12 trading sessions) it’s probably safe to say that something has in fact changed in 2019.
“Sure, keep an eye on the tickers, but 2019 will be remembered for the year many projects came out of quiet mode and proved why cryptocurrencies are worth more than the hype surrounding them,” said Balter.