Bitcoin Upside Momentum Continues
15 Dec 2020 · 3rd Party Analysis
1 . The crypto giant reaches new heights
2 . Bitcoin becomes increasingly popular with larger audiences
The price of Bitcoin has been climbing steadily for the past four days. The lows in the region of $17,700-650 on December 11 provided a buying opportunity for Bitcoin bulls who pushed the price to the Sunday high above $19,300. As of Tuesday morning, before the London market opens, Bitcoin has currently eased off its Sunday highs but remains well bid above the $19,000 mark.
Crypto Trading and Volatility
A slight correction came for Bitcoin in the first half of December as the digital currency hit an all-time high of almost $20,000 on Monday, Nov 30. The peak of $19,850 per Bitcoin was above the highest levels reached three years ago when the market saw an enormous rally that pushed hundreds of digital coins to record highs. For the period of Nov 30, the all-time high, to December 11, the lowest point to follow, Bitcoin depreciated by 11%. Given that crypto investors have learned to live with that type of high volatility, the market was quick to pick up the digital asset and erase most of the losses as Bitcoin’s current market price is close to $19,200.
Positive Outlook for Cryptocurrency in 2021
This time, according to many, the rally is sound and rational and the foundations are firm. Bitcoin has surged more than 270% since March. Overall, 2020 has been a very exciting year for Bitcoin. Price is up over 180% since Jan 1 when one Bitcoin was trading at around $6,900. Many new milestones have been reached as the market sentiment towards the digital space has shifted. Looking ahead to 2021, there are even more reasons to be excited about the cryptocurrency market.
Big Businesses Go for Crypto
One of the biggest drivers towards growth for Bitcoin in 2020 has been institutional ownership. This year has formed a new trend with corporations putting Bitcoin onto their balance sheet. One of the biggest examples we’ve seen is by MicroStrategy, a public company that put $425 million of its treasury into Bitcoin. The market also saw other large corporations join, such as Fidelity, which launched a large institutional-only fund. Additionally, we’ve seen Bitcoin futures open interest soar on the CME. All these are indications that institutions are becoming more interested in exploring the opportunities available in the crypto space.
Another trend in Bitcoin that saw exponential growth in 2020 is the rate of accessibility. As new points of access get enabled, customers who are not familiar with the blockchain technology but want to purchase Bitcoin are now starting to become involved through PayPal as the company recently announced its 350 million customers will now be able to buy, sell or hold Bitcoin in their wallets. If this accessibility trend is sustained as we go into 2021, it could have a positive effect on the wider adoption of Bitcoin and other cryptocurrencies.
Bitcoin Acceptance Amid the Pandemic
Lastly, 2020 was a strong year for the creation of new money by the US government. As the coronavirus pandemic caused a market meltdown. As millions of jobs were lost and businesses closed, the supply of money by the US increased enormously. The economy was able to recover from its lows thanks to the money supply. But what was the effect on cryptocurrency? Bitcoin became accepted as a digital store of value, comparable to gold. Gold’s price is up 20% year to date, while Bitcoin has increased its value by over 180% for the same period. As 2021 unfolds, crypto investors will be watching the government and the stimulus bills. As well as the inflationary pressures that might affect cryptocurrency valuations.