As Bitcoin continued to extend its rally in South Korea with the price topping 10 million won ($8,400) for the first time since last year, analysts are scrambling to figure out what caused the world’s biggest cryptocurrency to suddenly recover.

According to Seoul-based cryptocurrency exchange Upbit, Bitcoin was priced at 10.4 million won per coin as of 2 p.m. on Tuesday. The figure was 0.3 percent up from the previous day when it recovered to the 10-million-won range for the first time since May last year.

Ethereum and other rival coins also joined the rally. Ether was traded at 32,000 won on Tuesday, compared to March when it was priced at between 13,000 won and 16,000 won. Ripple was priced at 488 won, up 45 percent from a month before.

The last time Bitcoin was traded above 10 million won was November 2017 when it prompted a market frenzy. After soaring to 25 million won, its price plunged to 3 million won.

While various factors might be at play, analysts said the latest surge appears to be driven by two factors: Expectations over global tech companies’ foray into the cryptocurrency market and concerns about fiat money following the US-China trade dispute.

According to a BBC report, Facebook is planning to launch its own cryptocurrency in early 2020, allowing users to make digital payments in a dozen countries. Dubbed GlobalCoin, it will be tested for application by the year-end.

“News that Facebook and other local IT companies plan to use blockchain technology might have influenced the rise in Bitcoin prices,” said Kong Dan, an analyst from a Seoul-based cryptocurrency institute Coinone.

Korean tech giants are also reportedly coming up with their own measures to incorporate cryptocurrencies into their business. Samsung Electronics, for example, has allowed consumers to conduct digital currency transactions on its Galaxy S10 smartphone.

Kakao, the country’s biggest mobile messenger app, also plans to create its own cryptocurrency called Klay. Developed by its affiliate Ground X, the coin will be available on its blockchain platform Klaytn, scheduled to be launched late next month.

Some industry watchers attribute the price surge to the escalating trade dispute between the US and China. They speculated that jittery investors are using cryptocurrencies as a hedge against growing market uncertainties.

“It’s certainly interesting that the (Bitcoin) price started accelerating when the trade discussions broke down,” Barry Silbert, CEO and founder of Digital Currency Group, said during an interview with Fortune’s Balancing The Ledger show.

Despite efforts by tech companies to build their own cryptocurrencies and launch projects using the underlying blockchain technology, some experts expressed caution against overheated enthusiasm.

According to In ho, who runs Seoul-based research institute Korea Society of Blockchain, the latest Bitcoin price surge had less to do with external factors. He said it was a regular price fluctuation caused by market principles.

Bitcoin was designed to slash its production in half to prevent inflation from eroding the value of digital assets. While the investors have to wait until next year for the next “halving,” expectations of reduced supply appear to be reflected in the latest surge, he said.

“Price fluctuation is part of the nature of Bitcoin. It has been volatile regularly since its creation,” the experts said. “Every time we wait for a halving, there are expectations of increased demand and reduced supply. It’s simple logic.” 

(jasonyeo@heraldcorp.com)