Bitcoin rallies above $40,000, then pulls back again

The world’s largest cryptocurrency has surged since dipping below $30,000 on July 20, partly because investors see it as a hedge against inflation and currency values if and when the Federal Reserve starts tapering its $120 billion-a-month asset purchases.

Other cryptocurrencies followed bitcoin’s lead, falling Sunday after a streak of daily gains. Ethereum ETHUSD, -4.89% was recently trading off about 5% on the day, while dogecoin DOGEUSD, -3.08% was down about 3.5%, according to Kraken data.

While bitcoin is about flat over the past five days, it’s up 14% over the past month, and up 38% year to date, even though it’s off around 40% from its all-time high around $65,000 in April.