Bitcoin surpassed $ 21,000 for the first time, another milestone in what has been an impressive rally for the controversial digital asset this year.
The world’s largest cryptocurrency rose as much as 10% to $ 21,293 in New York on Wednesday, justifying forecasts that were dashed months ago and led to even higher prognostications. Bitcoin has almost tripled this year, with the rally accelerating on Wednesday after cutting $ 20,000 earlier for the first time.
“We have a new line in the sand and the focus is shifting to the next $ 30,000 round number,” said Antoni Trenchev, co-founder and managing partner of Nexo, a crypto lender. This is the “beginning of a new chapter for Bitcoin. It’s a narrative that the media and retail crowd can right-click on because they are clearly absent from this rally. ”
Bitcoin has surged despite a serious crash in March that saw it lose 25% in the midst of the coronavirus pandemic. Supporters have seized on the narrative that the coin could act as a store of wealth amidst the printing of rampant central bank money, even as inflation remains largely silenced.
In addition, some Wall Street companies have taken more interest, with many trying to capitalize on their earnings in a world of rock bottom interest rates. For example, Guggenheim Partners LLC recently he said he could invest up to 10% of its $ 5.3 billion Macro Opportunity Fund in Bitcoin trust.
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Bitcoin cross above the $ 20,000 and $ 21,000 levels were its latest milestones in recent weeks – the coin in late November reached a new peak three years after setting a previous peak. It had traded at just a few cents for several years after being launched in late 2008 by an unknown software developer in the aftermath of the global financial crash.
“People tend to pile up in momentum trades, so Bitcoin could get more upside from here,” said Ed Campbell, portfolio manager and managing director at QMA.
Peer coins also rose on Wednesday, with Bloomberg’s Galaxy Crypto Index – which tracks some of the major cryptocurrencies – gaining as much as 7.2%. Dash and Litecoin advanced at least 6%.
Ether, the second-largest digital asset, after Bitcoin, rose as much as 6.9%, according to data collected by Bloomberg, so much so that the cryptocurrency exchange Coinbase said it was experiencing congestion problems and delayed issuing of the token. Customers recorded complaints about the service the Downdetector website, which tracks cuts.
The rally follows an announcement by the CME Group Inc. that it has plans to expand its suite of cryptocurrency derivatives offerings to include the future of Ether starting in February.
To Meltem Demirors, chief strategy officer at CoinShares, a Bitcoin cross above $ 20,000 marks an important psychological milestone.
“The biggest thing is the macroeconomic conditions – it’s the perfect setup for Bitcoin,” he said by phone. “From here, things are going to move very quickly and I wouldn’t be surprised if we touch $ 35,000 in the next three to six months.”
– Supported by Claire Ballentine, and Anne Cronin
(Updates prices throughout.)