Bitcoin hit a new milestone on Monday.
The flagship cryptocurrency hit a new record high for the first time in three years as traders raised their bids in hopes of big profits. During the US session, it was trading at $ 19,864, up 9.16 percent for the day. According to data pulled from Coinbase Exchange, it beat the 2017 record high of $ 19,666.
Bitcoin has been tirelessly recovering for 10 months. Source: BTCUSD on TradingView.com
Bitcoin is rallying relentlessly for the last 10 months. Source: BTCUSD on TradingView.com
The climb was part of a bigger and broader rally that began in March 2020. During the month the Federal Reserve and other central banks invested trillions of dollars in their capital markets. The move weakened the purchasing power of the US dollar.
Meanwhile, banks also introduced extremely low interest rates and pledged to buy government bonds indefinitely. This drove down real yields on the safest government bonds and pushed investors to make profits in riskier assets. Bitcoin, the riskiest of them all, benefited from it. It rose by up to 415 percent between March and today.
Bitcoin hits Wall Street
Many analysts agreed that the recent rally was in response to investors’ inflation fears combined with a troubling gold market.
Guggenheim Partners, an investment firm on Wall Street, said it could invest up to $ 530 million in BTC through Grayscale’s Bitcoin Trust. Meanwhile, Raoul Pal, CEO of Real Vision Group, who was previously critical of Bitcoin, switched sides by announcing that he was shuffling his entire gold portfolio into the cryptocurrency market.
“OK, [the] Last bomb, “he tweeted,” I have a sell order tomorrow to sell all of my gold and to buy BTC and ETH (80/20). I don’t own anything else (other than some bonds and some $). 98% of my net cash. ”
Cameron Winklevoss, co-founder of Gemini, a US cryptocurrency exchange, said:
“Bitcoin is an emerging store of value that defends itself against inflation and has the potential to sell gold. This means that starting at $ 19,000, the value could increase 25x. No other liquid asset in the universe can credibly offer this magnitude of asymmetrical payoff over the next decade. ”
Sentiment allowed Bitcoin to break above key resistance levels in a row on Monday. Nevertheless, the cryptocurrency also declined after the topping-out ceremony, led by short-term profit-taking behavior among day traders.