For the first time in close to 3 years, Bitcoin has crossed the $19, 000 mark. It is not surprising that this comes after breaking the $17, 000 and $18, 000 within the same week. Analysts believe that bitcoin is already about to beat its all-time high of $20, 089 which was reached on December 17, 2017.
They also suggest that bitcoin’s limited supply of 21 million makes it a good hedge against inflation. Some investors think the value of traditional currencies will fall as governments and central banks unleash massive stimulus packages to support economies hit by COVID-19.
As a growing number of institutional investors enter the bitcoin market, led by PayPal and GrayScale, it is becoming more apparent that bitcoin’s value as a hedge against macro-economics grows by the day. The digital currency began the year below $1,000 and its gains have accelerated as investor interest grows.
The market capitalization of bitcoin also hit its all-time high this week at about $329 billion, according to data provided by crypto analytic firm CryptoQuant.
It is worth noting that some of the reasons for the sharp rise include the:
- demand for riskier assets amid unprecedented stimulus programmes to counter the COVID-19 hit;
- hunger for assets perceived as resistant to inflation; and
- expectations that cryptocurrencies will gain wider acceptance as a method of payments.
Just a couple of weeks back, a leaked technical analysis prepared for its clients pointed to the Bitcoin price hitting $318,000 in December 2021. This was revealed by a Twitter user Alex, who leaked the document created by Thomas Fitzpatrick, an executive at Citibank. The analysis does suggest that Bitcoin “price is likely to continue to go up, and a lot.”