Victor Ugochukwu · Dec 14, 2020 . 5min read
Bitcoin price hits a new high without the chatters of a bubble
Bitcoin price for the first time in three years has hit a new record high topping $19,850 on Cyber Monday, November 30th.
By Victor Ugochukwu · Dec 1, 2020 . 8min read
The cat with nine lives is what some people call it; Bitcoin keeps proving pessimists wrong almost every time it comes crashing, only to rise again like the Phoenix. Bitcoin price for the first time in three years has hit a new record high topping $19,850 on Cyber Monday, November 30th.
Bitcoin’s resurgence to breaking a resistant level after trying to move past December 2017 all-time high last week comes with no much of a surprise. Pro Bitcoin traders seem to be high on the optimism with several indicators pointing in the direction of a sustained price increase. For instance, consider Futures Premium. This measures how relatively expensive longer-term futures contracts are to the current spot at traditional markets. It is currently sitting at 1.1%, which is considered a healthy position. Investors consider this position bullish. And perhaps, the more interesting news is that while Bitcoin dropped more than 14%, Futures Premium indicator held above 0.8%. This also suggests while Bitcoin seemed to have rebounded faster and smashed its resistance level yesterday.
And to buttress how different this Bull run is from 2017, Philip Gradwell, the Chief Economist at Chainalysis said
“It’s a very different set of people who are buying Bitcoin recently, and they are doing it in steadier amounts over sustained periods of time, and they are taking it off exchanges and holding it as an investment.”
The news had always been that the institutional are coming into Bitcoin. While previous years had the likes of JP Morgan castigating Bitcoin and even threatening to fire their staff for indulging in Bitcoin, 2020 has seen a mad rush of this sector.
Notable events in these past months that fuelled the rise of Bitcoin price
It was only recently that the Office of the Comptroller of Currency issued a guideline that it is legal for banks to offer crypto entities custody services. This levelled any concern from financial institutions as to offering their services to cryptocurrency exchanges most especially.
Microstrategy has not seized from being in the lips of enthusiasts within the cryptocurrency space and even Wall Street managers. After it invested $425 million by buying 38,250 BTC in August, that investment is now worth $745 million today.
Square followed suit by investing $50 million representing 1% of its assets in October into Bitcoin. Square is at least up by $41 million in profits barely two months later.
PayPal and Cash App have also been gulping up Bitcoin supply in their retail services. PayPal’s CEO Dan Schulman also recently announced that PayPal would begin allowing users to transact with crypto as a funding instrument across 28 million businesses early next year. Pantera Capital opined that PayPal is among the companies causing the supply squeeze currently happening in Bitcoin sales.
Grayscale has also been piling up in its Bitcoin purchase. The institutions are not just into Bitcoin now; they can’t seem to be getting enough to feed their hungry appetite.
Bitcoin price as at publication time is $19,850. It looks set to smashing the $20k price target as the year gradually winds to a close after it fell as low as $5,340 during the coronavirus market tumble.
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