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Three years ago, the historic wave of Bitcoin dominated Thanksgiving dinner conversations. This year, cryptocurrency is in the midst of another notable rally and yet hardly anyone talks about it.
How feverish was Bitcoin’s last leg? With coin trading around $ 16,300, it has been more expensive in only eight other cases in the past decade, Bloomberg data shows. Almost all of them happened during the 1,375% surge in 2017 which saw it hit nearly $ 20,000 before a spectacular dip wiped out 70% over the next year.
The world’s largest cryptocurrency by market value has gone through a boom and recession and a second boom since its hectic heyday in 2017. Much has changed in the years since then, and cryptocurrency enthusiasts claim that digital coins have went through a process of maturation. But the craze surrounding digital currencies back then is largely absent, despite Bitcoin being around 15% lower than its vaunted all-time highs.
“The charm that comes with it has vanished. You have the hardcore group “I am a cryptocurrency investor”, but it hasn’t really expanded because it’s been so volatile, there have been so many questions about security and what the regulations might do, “said Kathy Jones, chief income strategist. Fixed for Schwab Center for Financial Research. “The number of applications I get now is a fraction of what I got a couple of years ago when it was really hot.”
By all accounts, Bitcoin had a great year, despite a crash at the start of the coronavirus pandemic that saw it drop 25% in March. It has more than doubled since December, and many fans are once again looking to the $ 20,000 level as the next barrier to break.
Developments in recent months have helped fuel this year’s rally. Fidelity Investments launched a Bitcoin fund, adding its star power and legacy branding to the space. Some prominent Wall Street names have bought. Public companies Square Inc. and MicroStrategy Inc. recently invested in the coin. And one of the biggest events for fans was PayPal Holding Inc.’s October decision to allow customers to access cryptocurrencies.
But market watchers say more pressing issues have captured headlines this month.
“It’s a bit in the shadows right now,” said Bryce Doty, portfolio manager of Sit Fixed Income Advisors. “Bitcoin gets attention when it seems the world is coming to an end, it’s the anti-vaccine trade. As stocks and everything else did better and people forgot about trade wars and things were eclipsed by the pandemic, Bitcoin took a back seat to all of that. “
Matt Maley of Miller Tabak + Co. says institutional investors may be paying more attention to the crypto space – he has received a few calls about it in recent weeks. But individual investors, many of whom suffered the 2018 Bitcoin crash, may have their eyes on other issues. This year has been torturous and many are concerned about the pandemic and economic recession, says the company’s chief market strategist.
“The people – many of these people were badly burned – are less enthusiastic now,” he said. “It certainly isn’t the huge hustle and bustle we had in 2017 – which could change if it breaks through the 2017 highs.”
Guy Hirsch, chief executive for the United States at multi-asset brokerage eToro, is tracking a slightly non-traditional sentiment indicator: the total number of Tweets mentioning Bitcoin on a daily basis. At the height of the cryptocurrency boom, he was seeing around 120,000 Bitcoin-related tweets per day. That number now fluctuates between 30,000 and 60,000, according to data from eToro and The Tie.
“This rally is clearly different in many ways,” Hirsch said over the phone. It’s less speculative, he said, and although recent developments are moving towards “a snail movement, it’s in the right direction. In general, we are very optimistic about what is happening. “
Greg King, chief executive of Osprey Funds, a REX Shares subsidiary that runs a Bitcoin trust, says the enthusiasm is there “but I think it’s a more ingrained enthusiasm.” He added: “The longer Bitcoin persists and the more access ramps are built and the more interest increases, I think it is becoming more and more real in the minds of investors – everyone has progressed three years further down the adoption curve.”
King says he doesn’t get nearly as many requests from distant relatives about Bitcoin’s performance as he did a few years ago. But it solicits a prospect: Its price went from $ 1,000 in early 2017 to over $ 19,000 later that same year.
“Here, we haven’t even hit the previous high,” he said. “Yes, it’s back up to $ 16,000, but people at the dinner table will talk about it when it reaches $ 50,000 or $ 100,000 – so Thanksgiving is going to get very exciting and I’ll start hearing those relatives again,” he said. “That’s when I think it’s really on people’s radar.”
–With the assistance of Lu Wang and Casey Wagner.
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