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After nearly three years of waiting, Bitcoin investors can celebrate a new all-time high on Monday after the major cryptocurrency traded as high as $ 19,786.24, breaking the previous record set in December 2017 of $ 3, according to CoinDesk Bitcoin Price Index (BPI) data.
Longtime bitcoin investors have weathered more than one bear market cycle. But for new entrants, the record highs represent validation of their investment as the cryptocurrency continues to demonstrate resilience.
“The importance of a new all-time high in dollar terms cannot be understated,” Kevin Kelly, co-founder of Delphi Digital and former equity analyst at Bloomberg, said in a direct message with CoinDesk. “Many skeptics have publicly denounced bitcoin for not reaching a new high despite such a favorable macro backdrop, so this is yet another testament to bitcoin’s resilience.”
This favorable backdrop includes, in part, an unprecedented era of spending by central banks around the world to help fight the economic slowdown induced by the pandemic. Many bitcoin investors see the digital asset as a hedge against the potential inflation of this loose monetary policy.
Since the start of the year, bitcoin has gained 167%. Since its annual lows in March, after dropping more than 50% in a single day, bitcoin has risen by more than 400%.
To be sure, bitcoin’s positive correlation with traditional markets remains somewhat strong above 0.4, according to Coin Metrics, unlike a long-standing narrative backed by bitcoin investors that bitcoin is not. correlated with traditional markets. With regular currency interruptions and new investors questioning the reliability of widely disseminated market data, the teen market has further room for maturation.
Nonetheless, cryptocurrency analysts describe the ongoing rally as healthy and poised to continue as institutional and retail money flows steadily into bitcoin. Big payments companies like Square and PayPal, for example, continue to funnel retail capital into bitcoin.
For the third quarter, Square reported a record $ 1 billion bitcoin revenue through its CashApp mobile wallet. PayPal, after announcing its plan to support bitcoin and other cryptocurrencies in October, quickly removed its waitlist for the service less than a month later, citing an overwhelming demand.
Institutional demand is also increasing, partly represented by record growth in the CME Group’s bitcoin futures market, as CoinDesk reported. Led by leading investors such as Stanley Druckenmiller, Bill Miller, Paul Tudor Jones and Rick Rieder of BlackRock, the financial public’s thinking on bitcoin is heating up dramatically as it allocates more and more capital to the main digital asset.
Fundamentally, the case for a sustained rally in bitcoin is stronger than ever, according to Karim Helmy, data analyst at Coin Metrics. The total number of active bitcoin addresses has reached all-time highs, and the economic density of the network – the value processed per byte – is approaching levels not seen since the last bull run, he told CoinDesk in a post. direct.
Despite tens of thousands of other cryptocurrencies competing for investors’ share of mind, bitcoin is leaving almost all of them behind, with most “altcoins” still down double-digit percentages from their own. records. Ether is still down 58% from its all-time high, also set at the end of 2017. Litecoin and XRP are down 77% and 82% from their respective highs.
Bitcoin’s record, however, stems from a curious lack of publicity from the general public and the media, according to data from The Tie.
The total volume of bitcoin-related tweets, for example, is well below levels at the end of 2017 and largely stable over the past two years. Media mentions are also at very low levels. Research interest in bitcoin, furthermore, is less than a fifth of the level seen at Bitcoin’s high in 2017, according to Google Trends.
“I don’t think a lot of people outside of the industry care until we hit all-time highs,” Messari bitcoin analyst Ryan Watkins said in a direct message with CoinDesk. The coronavirus pandemic and the US presidential election dominated general public attention in 2020, he noted.
As investors seek more benefits, any continuation of the Bitcoin rally will be “defined by a larger investor base as new market participants are unlocked,” Kelly said.
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