Bitcoin surpassed $US20,000 for the first time, another milestone in what’s been an eye-popping rally for the controversial digital asset this year.
The world’s largest cryptocurrency rose as much as 7 per cent to $US20,787 in New York on Wednesday, vindicating forecasts that were scoffed at months ago and leading to even higher prognostications. Bitcoin has almost tripled this year.
“We have a new line in the sand and the focus shifts to the next round number of $US30,000,” said Antoni Trenchev, co-founder and managing partner of Nexo, a crypto lender. This “is the start of a new chapter for bitcoin. It’s a narrative the media and retail crowd can properly latch onto because they’ve been noticeably absent from this rally.”
Bitcoin has surged despite a severe crash in March that saw it lose 25 per cent amid the coronavirus pandemic. Proponents have seized on the narrative that the coin could act as a store of wealth amid supposed rampant central-bank money printing, even as inflation remains mostly muted.
In addition, some Wall Street firms have taken a greater interest, with many seeking to capitalise on its gains in a world of rock-bottom interest rates. Guggenheim Partners, for instance, recently said it might invest up to 10 per cent of its $US5.3 billion ($7 billion) Macro Opportunities Fund in a bitcoin trust.
Bitcoin’s cross above $US20,000 is its second major milestone in recent weeks – the coin at the end of November reached a new high three years after setting a prior peak. It had traded at a few cents for several years after its late 2008 launch by an unknown software developer in the wake of the global financial crash.
“People tend to pile into momentum trades, so bitcoin could have more upside from here,” said Ed Campbell, portfolio manager and managing director at QMA.
“Many of our clients have been expecting bitcoin to surpass its all-time high of $USUS20,000 given the recent news from major institutional players like SGX and MassMutual openly endorsing bitcoin,” said Scott Freeman, co-founder & partner at trading firm JST Capital.
“While this is a major milestone for this nascent asset class, as retail, institutional, and blue-chip investors alike allocate more capital to this space, it would not be surprising to see other coins follow in BTC’s footsteps and for this upward trajectory to be sustained into 2021.”
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Source: Thanks smh.com