Bitcoin, the world’s largest cryptocurrency, hit another all-time high on Wednesday, surpassing $ 35,800.
Bitcoin hit another all-time high on Wednesday as extreme swings continued to rock the world’s largest cryptocurrency.
The famous volatile digital coin rose 6% to $ 35,842, breaking the previous high on Jan. 3, and was trading at $ 34,988 at 6:47 a.m. in New York. It had plunged to 17% on Monday. Bitcoin quadrupled in 2020.
A range of factors have been cited for the rise of Bitcoin, showing how difficult it is to identify the immediate cause of the latest bout of volatility. Some traders cited a long-term price forecast from JPMorgan Chase & Co. of up to $ 146,000, while others cited the general risk climate in global financial markets.
“A clear bull market, and we won’t get a 30% to 40% drop like in 2017,” said Vijay Ayyar, business development manager with the crypto exchange Luno in Singapore. “The market is more mature with bigger buyers. Keep in mind that we are in a parabolic phase and they are overtaking. “
While the latest price swings may be reminiscent of past boom and bust cycles, Bitcoin’s ability to reverse its trend so quickly this week suggests that institutional investors are not giving up the space, said Matt Long, manager. of premier distribution and products with OSL crypto brokerage in Hong. Kong.
“Monday’s drop was instructive as institutional investors took the opportunity to buy,” he said. “Institutional investment is firmly in the digital asset sector and could accelerate.”
More renowned institutions and investors, from Paul Tudor Jones to Scott Minerd and Stan Druckenmiller, have either started to allocate funds to Bitcoin or have declared themselves ready to do so.
“The upward pursuit is back based on the idea that the bigger Main Street investors are interested in building longer-term positions,” said Stephen Innes, chief global market strategist at Axi. “This is the new era of blockchain technology adoption that Bitcoin is so closely tied to.”
Some argue that the cryptocurrency offers a hedge against a weak dollar and the risk of inflation in a world awash with fiscal and monetary stimulus.
“If inflation increases, or even if it doesn’t, and more companies decide to diversify a small portion of their cash balances into Bitcoin instead of cash, then the current relative runoff towards Bitcoin would become a torrent, ”Bill Miller of Miller Value Partners LLC wrote in a blog post.
But others say retail investors and trend-following quantitative funds are creating an unsustainable bubble.
“Bitcoin is better at being gold than gold is at being gold,” said Anthony Scaramucci, founder and managing partner of SkyBridge Capital, in an interview Tuesday. The company is the latest to join the Bitcoin bandwagon, launching a crypto-centric fund this week.
(Updates with additional comment.)
– With help from Matt Turner.