Bitcoin has broken the tough $ 19,500 barrier and jumped to two-week highs on Wednesday.
The leading cryptocurrency at market value reached as high as $ 19,874 during European trading hours. That’s the highest level since Dec. 1, when bitcoin hit its highest ever of $ 19,920, according to CoinDesk 20 data.
It remains to be seen whether bitcoin can hold land above $ 19,500. The cryptocurrency has repeatedly failed to establish a foothold above that level since Nov. 22, courtesy of taking some profits from some investors. Enforcing the expected big cut above the psychological barrier of $ 20,000 may be an uphill task for the bulls in the short term because large sales orders are on the way to $ 20,000, as discussed Tuesday.
That said, the long-term bullish case for bitcoin, a widely touted hedge against devaluing fiat currency and a store of value asset, continues to strengthen with observers predicting a deeper dollar decline in 2021 and a global stock pile -a growing pool of negative-yielding bonds.
International investment bank and French financial services firm Societe Generale is now forecasting a 5% fall for the Dollar Index (DXY) in 2021 and more losses in the following year, according to efxdata.com. Other prominent investment banks such as Morgan Stanley, Goldman Sachs and JPMorgan also expect the bluefin to continue to lose ground next year.
The Dollar Index, which tracks the value of the greenback against big money, is hovering at a 32-month minimum of 90.20 at the time of press. Global reserves have declined 6.5% this year, largely due to the Federal Reserve’s money supply policies aimed at countering the economic slowdown caused by coronavirus.
Bitcoin has steadily moved in the opposite direction to the dollar index this year. Prominent companies listed publicly as the business intelligence company MicroStrategy have adopted bitcoin as a reserve asset as protection against the falling dollar.
“What we’re trying to do is protect our treasury. The buying power of cash is quickly fading, ”Michael Saylor, CEO of Nasdaq-listed MicroStrategy, told CoinDesk last month while explaining the rationale behind the company’s bitcoin purchases. The cryptocurrency is a store asset of better value than gold, he said.