The granddaddy of cryptocurrencies – Bitcoin (BTC) hit $18,600 over the weekend for the first time in nearly three years, before pulling back slightly to be at today’s current price of $18,512.
The surge in Bitcoin, taking the cryptocurrency to levels last seen in December 2017, has been the talk of the crypto world. Analysts all over the world are now looking at Bitcoin and making comparisons to the golden period of the tail end of 2017 to now. Are they justfied?
Bitcoin surpassed $18,600 on Friday night, continuing an upward drive that really took off from early October. Bitcoin market cap is up 160% in 2020, and up 190% since March 15th, following the crash in the second week of March that saw the price plunge 25%.
Now approaching its all-time high of around $19,800 hit in December 2017, will it continue its upward journey?
The Hype
There are big differences between 2017’s surge and 2020’s. The press in 2017, was in a frenzy over Bitcoin, driving prices and fueling the hype. Now, the press is rather muted and although there is coverage in the press, there is nothing like the hype and frenzy in both the financial press and non-financial press as in 2017.
The Cause
Bitcoin is in a very different place in 2020 than in 2017. The biggest reason for the surge this year can be attributed to institutional acceptance.
Over the last few years, big financial institutions have gradually been adopting crypto. Grayscale Investments, the largest crypto investment firm totalled up an impressive $10 billion in assets in the third quarter of this year. Goldman Sachs appointed a new head of digital assets in August and JPMorgan launched JPM Coin, an internal digital token for use by the bank’s institutional clients.
The Stability
Since the big bitcoin bubble burst of December 2017, Bitcoin has been in a period of relative stability. Investors and markets like stability. It is something you can plan for, whilst instability and volatility make financial institutions apprehensive.
The gradual and unspectacular rise of Bitcoin, free from hype and somewhat under the radar has been good for the digital currency. For nearly two years, little was said, with Bitcoin quietly going about its business. Now, it is the talk of the town the spotlight is once again upon Bitcoin, but the quiet period has been good for Bitcoin. It’s just a shame that quiet period has ended.
PayPal Adoption
PayPal Holdings PLC (NASDAQ: PYPL) announced it will soon allow buying, holding, and trading of bitcoin and other cryptocurrencies in 2021. The move sent PayPal’s shares rocketing and Bitcoin’s price higher.
Bitcoin was already rising before PayPal’s announcement, but after the PayPal crypto announcement, Bitcoin’s chart line went vertical, and many attribute bitcoin’s recent price ride directly to the PayPal announcement.
The Future
A big difference between now and 2017 is the future. We know a good deal more about crypto, its possibilities, its boundaries et al now than we did in 2017. We can see, as highlighted by the institutional adoption, a place in institutional institutions for Bitcoin and other crypto’s.
Bitcoin is here to stay and $20,000 by the end of the year, is just the start.
