After testing the patience of investors for three weeks, bitcoin plunged past $ 20,000 to reach its all-time highs and is currently trading above $ 21,000.
The number one cryptocurrency jumped at market value over the key psychological threshold during the early US trading hours, surpassing the previous peak price of $ 19,920 recorded on December 1. For the current price of $ 21,123, bitcoin i up 8.8% over 24 hours, according to CoinDesk’s Bitcoin Price Index (BPI).
The value of Bitcoin has doubled in the past three months and the institutional-led rally is looking sustainable. Meanwhile, other prominent cryptocurrencies like ether, litecoin and XRP are still down 58% to 88% of their respective lifetime highlights reached three years ago.
“When this [rally to near $20,000] it happened in 2017, there was a real lack of products for the converters to test, but today there are endless uses, protocols, cross-farming services, lending, standard trading, etc., ”Soravis Srinawakoon, CEO and co-founder of trans- chain data oracle Band Protocol told CoinDesk. “So we would expect to see the new adopters hanging around this time.”
Cutting above $ 20,000, which represented a significant barrier in the mindset of most traders, is completely new ground for bitcoin and opens the doors for a climb to $ 100,000 during 2021, according to some.
That rise would bode well for other crypto sectors as well, including decentralized funding (DeFi), according to DversiFi CEO Ross Middleton.
“Bitcoin profits are partly recycled back into other smaller tokens later in the bull cycle. In 2017 that was other blockchains like Ripple, Litecoin and EOS, ”said Middleton. “However, this time around, funds are likely to flow into DeFi’s new crop of blue chip projects, built on Ethereum.”
DeversiFi’s CEO highlighted DeFi Aave, Compound, Synthetix and Yearn Finance protocols as his choices of where the capital might flow.
And while bitcoin is now up over 180% year-on-year, gold has added just over 22%. Bitcoin, often referred to as digital gold, disconnected from the yellow metal this quarter with a more than 80% rally. Meanwhile, gold has suffered a 1% fall, with investors withdrawing money from exchange-traded funds.