Here we go again, the story continues!
Bitcoin is trading near the all-time high of $19,857.03 set on Monday, after jumping 15% since one of its worst one-day drops this year on Nov. 26.
“We should surpass $20,000 this week, targets being anywhere around $20,000-$25,000,” said Vijay Ayyar, head of business development with crypto exchange Luno in Singapore. But after that he expects a 30% drop since Bitcoin tends to “get everyone bullish and then dump,” he said.
Mixed opinions as the norm.
The surge in Bitcoin to a record this week “is likely a result of major institutional investors joining the bandwagon and purchasing a portion of BTC’s limited supply in the midst of a bull run,” said Gunnar Jaerv, chief operating officer of Hong Kong-based custodian First Digital Trust.
5 opinions to back Bitcoin.
JPMorgan Chase & Co. strategists said in a Nov. 27 note that investments into and out of the Grayscale Bitcoin Trust -- a fund that invests in and tracks the price of the digital asset -- is among the keys to the price outlook.
As well, the outstanding number of bitcoin futures contracts is surging on the Chicago Mercantile Exchange, seen as another sign that big investors are using commodities markets to speculate on the cryptocurrency’s price, according to the JPMorgan report.
2.Analysts are positive, sentiment.
Wall Street analysts have made positive comments over the past few days. AllianceBernstein, a $631 billion money manager, published a report saying the post-pandemic economic environment could create a role for bitcoin in investors’ asset allocation. Inigo Fraser Jenkins, co-head of the portfolio strategy team at Bernstein Research, wrote that when it comes to a role in hedging against inflation, “the driver of bitcoin is similar to that as for gold.”
3.Hedge fund managers have a long view
Well-known hedge fund managers are increasingly calling bitcoin a long-term investment. Legendary managers, including Paul Tudor Jones II and Stanley Druckenmiller, have recently said the cryptocurrency’s price, as denominated in U.S. dollars, could rise as the Federal Reserve prints money to help finance the government’s coronavirus-related emergency stimulus bills. The central bank has thus far created more than $3 trillion of new money in 2020, or more than three quarters of the entire amount created during its prior 107-year history.
4.The PayPal effect
PayPal (PYPL) is allowing customers – some 346 million active accounts – to buy bitcoin. The person-to-person payments network announced Oct. 21 it would let customers buy, sell and hold bitcoin. According to the company, the cryptocurrency will become a “funding source for purchases at its 26 million merchants worldwide.
The bitcoin market last week overcame a major source of concern – bitcoin outflows from one of the world’s biggest cryptocurrency exchanges, OKEx. Some traders and analysts had speculated the end of a five-week suspension of withdrawals might translate into liquidations that could put selling pressure on the bitcoin market. Data extracted from the cryptocurrency’s underlying blockchain network showed some 24,631 bitcoin, worth $500 million at current prices, flowed out of the exchange in the 24 hours after the suspension was lifted last week.
But bitcoin’s price action shows the market shrugged off the news, along with other negative developments, such as rumors the U.S. Treasury Department might be considering onerous cryptocurrency regulations. Traders also appeared to ignore data showing some large bitcoin traders – known as “whales” – might be preparing to dump their holdings in response to the cryptocurrency’s price rise according to coindesk.com.
As the norm, insiderkk has no advice, all we can say the asset is constantly in the news and sentiment at the moment is pushing the price up. Traders will love the volatility, investors will be thinking, is it time to buy sell or wait?