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NEW YORK (BLOOMBERG) – Celebrity endorsements, trade disruptions, rafts of new trading accounts – The bitcoin craze is back.
In a flashback to the frenzied Thanksgiving 2017 rush, retail traders are piling up in cryptocurrencies and driving prices back to all-time highs. The number of first-time buyers is set to eclipse in December 2017, said EToro, an Israeli-British company. Bitcoin trades per day are 81% higher than the remainder of 2020 combined. According to Google Trends, Google’s searches for “coinbase”, the cryptocurrency exchange, have reached their highest level in at least a year.
And encrypted Twitter hasn’t been so stunned in a long time. A quick tour through various hashtags produces a wide range of frothy posts. There’s a GIF of a beaming waitress serving glasses of champagne. “We’re about to get rich,” reads the tweet. Another fan tracks Bitcoin’s performance since 2017 and says, “… and here we go again”.
“Nothing like a pre-Thanksgiving Bitcoin run,” said Catherine Coley, CEO of Binance.US.
Bitcoin rose less than $ 100 from its all-time high after surpassing $ 19,000 (S $ 25,495) for the first time since 2017. It has now risen more than 40% in November alone and has more than doubled in 2020. The frenzy has spread to other coins. Dash was up 28% on Tuesday and Bitcoin Cash was up 15%. XRP recovered so quickly overnight that it reportedly caused an outage on the Coinbase exchange.
Overwhelming question
First-time shoppers flooded online investment apps with orders. Meanwhile, digital wallet and payment app providers are also seeing a big leap in cryptocurrency sales. Square Inc, the San Francisco-based payment company, said customers bought $ 1.6 billion worth of Bitcoin using its Cash app in the third quarter, an 83% increase over the previous period. .
Celebrities are jumping in too – Maisie Williams, the actor who played Arya Stark in “Game of Thrones,” bought Bitcoin even though a poll she ran on Twitter said she shouldn’t. “Thanks for the advice. I bought some anyway,” he tweeted.
“FOMO (fear of missing something) is slowly coming into play. We are only starting to see some of our retail clients borrow against their Bitcoin to buy more Bitcoin and this will ultimately push the rally to $ 20,000 and beyond, “said Antoni Trenchev, co-founder and managing partner of Nexo in London, which bills itself as the largest cryptocurrency lender in the world.
Trading became so intense overnight in XRP that US cryptocurrency exchange Coinbase crashed, according to media reports. This resulted in a dip in the coin after the massive rally took it to a record high.
Coinbase’s official status page claims its website is up and running and that an incident on Monday at 10pm has been fixed. A Coinbase spokesperson did not immediately respond to a request for comment. A Coinbase spokesperson said they are looking into Bloomberg News’s request for comment.
While Main Street investors may dream of hitting a jackpot, seasoned market veterans continue to be wary of the sudden boom. The world of cryptocurrencies is notoriously opaque, and unlike stocks or bonds, which are rooted in economic and business fundamentals, reading what makes Bitcoin tick can be impossible for even the most savvy investors.
“Whenever I see mainstream media attention like this, it usually leads to a sellout,” said Kevin Murcko, founder and CEO of CoinMetro, an Estonia-based crypto exchange. “The big fish have to lay off the risks so they open the doors to bring the retail guys to dump on. Not sure if that’s the case this time, but it looks a little suspicious.”
Even so, institutions are jumping into the mix too. In a report released last week, analysts at JPMorgan Chase & Co said fund managers were dumping gold and buying into the Grayscale Bitcoin Trust BTC, a publicly traded stock popular with institutions. The trust, which has a market cap of $ 12 billion, is going to three times its number in the third quarter, analysts at the bank said.
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