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The price of bitcoin has surpassed all-time highs.
According to CoinDesk BPI, Bitcoin was trading for $ 19,850 (KRW 22 million) at 0 am on the 1st. It broke the price in December 2017, when it occupied the previous high for three years.
Kevin Kelly, a former Bloomberg analyst and co-founder of Delphi Digital, told CoinDesk that “the significance of breaking an all-time high in dollar terms cannot be underestimated.”
One of the reasons for the rise in the price of Bitcoin is the provision of liquidity by central banks around the world to overcome the Corona 19 pandemic. Many bitcoin investors expect monetary policies that print money in each country to cause inflation and they are choosing bitcoin as a hedging instrument.
The price of bitcoin has risen 167% over the past year. In March (after plummeting more than 50% in one day), it hit an annual low and so far has rebounded by more than 400%.
For a long time, Bitcoin investors believed that Bitcoin had little correlation with traditional financial markets such as stocks. However, the current correlation, which has surpassed the previous high, is at a rather high level of 0.4, according to Coinmetrics, an on-chain analytics firm.
Cryptocurrency analysts have seen an upward rally as institutional and individual investor funds have steadily flowed into Bitcoin. For example, major payment companies like Square and PayPal are constantly luring individual investors to Bitcoin.
Square announced that in the third quarter of this year, Bitcoin Cash App sales hit $ 1 billion. PayPal announced in November that it will increase the limit on cryptocurrency purchases per week for US users from $ 10,000 (about 11 million won) to $ 15,000 (about 17 million won).
Institutional demand is also rapidly increasing, with the Bitcoin futures market on the Chicago Commercial Exchange (CME Group) showing record growth. As renowned investors such as Stanley Druckenmiller, Bill Miller, Paul Tudor Johnson and Rick Leader of Black Rock are allocating more and more money to digital assets, the traditional view of the financial world of Bitcoin is changing.
Coinmetrics data analyst Karim Helmi said bitcoin’s rally from a fundamental perspective is stronger than ever. “Active bitcoin addresses have risen to all-time highs,” he told CoinDesk, and the density of the network economy (traded per byte) is approaching levels never seen since the last bull market.
However, altcoins are watching the dominance of bitcoins. Although it has risen significantly recently, Ethereum’s price stands at 58% of its previous high at the end of 2017. Litecoin and XRP (Ripple) also fell 77% and 82% from their previous high.
According to cryptocurrency analyst The Tie, Bitcoin’s turnaround from the previous peak occurred outside the interests of the public and the media.
The total amount of bitcoin-related tweets was well below the level at the end of 2017 and has generally been unchanged over the past two years. Media coverage is also remarkably low. According to Google Trends, bitcoin searches are also less than a fifth of the 2017 high.
Mesari’s Bitcoin analyst Ryan Watkins told CoinDesk that “many people outside the cryptocurrency industry weren’t interested until Bitcoin hit its peak.” He saw the Corona 19 pandemic and the US presidential election grabbed public attention in 2020.
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