Curators of Black Media

Bitcoin Goes Parabolic Again And Rises Towards $20,000

Bitcoin
Bitcoin Goes Parabolic Again And Rises Towards $20,000 Image: MMG

Bitcoin momentarily hit an all-time high of $19,783 on Cyber Monday after falling below $4,000 in March 2020 soon after the coronavirus pandemic started, according to the data and news provider CoinDesk.

The digital token has gained and lost momentum more often than my grandfather driving on an interstate highway. In 2020, institutional buying has helped push up the price of bitcoin.

Bitcoin’s last spike in 2017 was different from this one, New York Times reported. Back then, investors in Asia who had just learned about cryptocurrencies helped it reach new heights. That momentum was lost when people questioned what bitcoin could do other than allow for easy drug ransom payments and online speculation.

The 2020 price spike is being fueled less by speculative buyers and more by traditional U.S. investors including companies who treat the digital currency as an alternative asset, somewhat like gold, according to an analysis from the data firm Chainalysis. Instead of trading in and out of it, more investors are using bitcoin to park part of their portfolios away from government influence and the traditional financial system, Chainalysis and other industry firms said.

“It’s a very different set of people who are buying bitcoin recently,” said Philip Gradwell, the chief economist at Chainalysis, which analyzes the movement of cryptocurrencies. “They are doing it in steadier amounts over sustained periods of time, and they are taking it off exchanges and holding it as an investment.”

Bitcoin’s previous peak was in mid-December 2017, almost exactly three years ago. However, different bitcoin exchanges and data sites vary on what the 2017 peak actually was. Many exchanges give a blended average of market prices from multiple exchanges, Yahoo reported. Crypto exchange BitMEX says the 2017 peak was $20,093, the highest of all-time-high estimates. Bloomberg pegs it at $19,511 based on terminal data. CoinDesk, the bitcoin news site, lists it at $19,783. CoinMarketCap says $20,089.

Only once it hits $20,100 will all sites likely agree on a definitive new high, Daniel Roberts reported for Yahoo.

“For those who are feeling bullish about #Bitcoin, today is the day you’ve been waiting for,” exchange Binance tweeted.

While bitcoin was climbing to its all-time high, gold struggled to find near-term bullish momentum as the price traded below $1,800 an ounce, Kitco News reported. One fund manager said that if investors want to know where the precious metal is heading, they should look at bitcoin.

Gold sees its best performance during odd quarters, according to Charlie Morris, chief investment officer at ByteTree Asset Management. Bitcoin, by comparison, has seen rallies of more than 60 percent in even quarters. The gold market is trading at fair value but fundamentals continue to support higher gold prices, he said. It’s just a matter of time before gold resumes its uptrend.

Bitcoin traded at pennies for several years after its 2008 launch in the wake of the global financial crash.

Cryptocurrency enthusiast Jack Dorsey made what he described as a mission-driven investment earlier this year when his payments company, Square, purchased 4,709 bitcoins — a $50 million investment that represents 1 percent of the firm’s total assets.

PayPal followed suit, saying it plans to let customers and the 26 million merchants on its network buy, sell and shop using bitcoin and other virtual coins. It plans to expand the service to Venmo in 2021.

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U.S. regulator the Office of the Comptroller of the Currency said this summer that banks will be allowed to hold cryptocurrencies for customers. 

“The excitement has been underpinned by regulators and mainstream financial companies that are trying to make cryptocurrencies safer and more accessible,” Nathaniel Popper wrote for NYT.

Bitcoin’s rise is part of a broader stock market rally despite the gloom of a pandemic-induced recession. The Dow, S&P 500 and Nasdaq hit record highs in the past month with Wall Street boosted by the news of possible coronavirus vaccines and the presidential election.

Some public companies said they got into bitcoin over concerns about the value of the dollar. In August, MicroStrategy, a software company in Virginia, said it bought $250 million of bitcoin to store some its cash.

“For anything that anybody invested in as a store of value, it starts to look like it is better to move that into bitcoin,” Saylor said.

The post Bitcoin Goes Parabolic Again And Rises Towards $20,000 appeared first on Moguldom.

J.D. Smith is a Tech Investor, Author, and Economist. He is the Founder of Visionary Creative International, a Tech-Based Consumer Solutions Company. He is also the Publisher for Black Media Daily, a 24/7 media outlet providing a voice for black content creators and a place to control their image throughout the Diaspora. J.D. is also the co-author of the book 100 Questions Black People Should Ask themselves, and a best-selling author of the book Made By Hustle. As a digital nomad, he promotes the importance of black travel and working from anywhere.