Bitcoin broke $ 23,000 for the first time in history as more Wall Street names crowded into the world’s largest digital currency up 220 percent this year.
As momentum builds, analysts are predicting more earnings ahead. The digital coin jumped more than 9 percent on Thursday, touching a peak of $ 23,256.92, according to a composite of prices compiled by Bloomberg. Bitcoin and the broader Bloomberg Galaxy Crypto Index have more than tripled this year. Cryptocurrency-related stocks climbed in South Korea, Japan and China.
The rally in digital assets is a polarizing view, given Bitcoin’s boom and bust history. Supporters argue that the cryptocurrency is shadowing on gold as a portfolio diversifier amid dollar weakness and potential inflationary pressures. Others see a speculative craze that will inevitably lead to a meltdown similar to the meltdown three years ago after a bitter Bitcoin rally.
Yet there are indications that longer-term investors such as asset managers and family offices are playing a greater role this time, alongside trend-sized volume funds. Bitcoin’s shortage coupled with Federal Reserve “cashback printing” means the digital ticket should eventually climb to around $ 400,000, Scott Minerd, chief investment officer at Guggenheim Investments, told Bloomberg TV on Wednesday.
Here’s what people in markets say about the Bitcoin movement:
The “price will now go from linear to parabolic” partly because retail investors have so far been “out of this rally,” said Kay Van-Petersen, global macro-strategist at Saxo Capital Markets Pte at Singapore.
“The move above $ 20,000 has been coming and I’m probably surprised it didn’t come sooner,” said Craig Erlam, senior market analyst at Oanda Europe Ltd. “A feed stimulus may have given it an extra kick but, let’s face it, Bitcoin doesn’t need it. A break above $ 20,000 may bring the buzz and a strong end to the year. ”
Bitcoin and gold
“Bitcoin’s lowest ever annual volatility measure against gold and the stock market near the end of 2020 may hold the crypto’s performance advantage in 2021,” said Mike McGlone, Bloomberg’s Intelligence strategist, in a report. It sees a Bitcoin-to-gold price ratio under the heading of 100, if history is repeated, from its current level of about 12.
If Bitcoin maintains its momentum, then “testing $ 36,000 will be the next real objective,” said Dan Gunsberg, CEO of Hxro, a crypto trading platform. But he noted that a significant cut below $ 13,800 would mark a much weaker period.
Bitcoin whale is emerging with $ 1 billion
A hedge fund specializing in volatility bets has emerged as one of the biggest investors in Bitcoin after quietly buying more than $ 600 million in cryptocurrencies and joining Alan Howard, co-founder of Brevan Howard Asset Management .
Eric Peters, chief operating officer of One River Asset Management, said in an interview that he set up a new company to capture the growing interest in cryptocurrencies among institutional investors.
In addition to its initial purchases, One River Digital Asset Management has commitments that will bring its holdings of Bitcoin and Ether to around $ 1 billion at the start of 2021, he said.