Bitcoin jumped to a new record on Wednesday as extreme swings continued to hold the world’s largest cryptocurrency.
The famous volatile digital coin was up a whopping 6% to $ 35,842, surpassing its previous high set on January 3, trading at $ 34,988 as of 6:47 am in New York. It was down a whopping 17% on Monday. Bitcoin quadrupled in 2020.
A series of factors have been cited for Bitcoin’s rise, showing how difficult it is to pinpoint the immediate cause of the latest volatility bout. Some traders pointed to a long-term price from JPMorgan Chase & Co. forecast of as much as $ 146,000, while others cited the general sphere of risk in the global financial markets.
“Clear bull market, and we’re not getting 30% to 40% drops like in 2017,” said Vijay Ayyar, head of business development at crypto exchange Luno in Singapore. “The market is more mature with larger buyers. However, keep in mind that we are in a parabolic phase and they are reaching the pinnacle. “
While the latest price swings may be reminiscent of previous boom and bust cycles, Bitcoin’s ability to reverse its decline so quickly this week suggests institutional investors are not leaving the space, said Matt Long, head of distribution and prime products at crypto. brokerage OSL in Hong. Kong.
Monday’s dip was educational, as institutional investors took the opportunity to buy back, he said. “Institutional investment is solid in the digital asset sector and could potentially accelerate.”
More settings and noted investors, from Paul Tudor Jones to Scott Minerd and Stan Druckenmiller, have either started allocating money to Bitcoin or have said they are open to it.
‘Chase Higher’
“The higher chase is back to the idea that larger high street investors are interested in building longer term positions,” said Stephen Innes, chief global market strategist at Axi. “This is all about the new era of blockchain technology with which Bitcoin is so uniquely intertwined.”
Some argue that the cryptocurrency provides a hedge against dollar weakness and inflation risks in a world awash with fiscal and monetary stimulus.
“If inflation increases, or even if it doesn’t, and more companies decide to diversify a small portion of their cash balances into Bitcoin instead of cash, the current relative drip into Bitcoin would be a torrent, Bill Miller of Miller Value Partners LLC wrote in a blog post.
But others say retail investors and trend-following quant funds are pumping up an unsustainable bubble.
“Bitcoin is better in gold than gold in gold,” said Anthony Scaramucci, founder and managing partner of SkyBridge Capital, in a interview Tuesday. The company is the latest to get on the Bitcoin cart and launch a cryptocurrency fund this week.
Read more: Does Bitcoin Boom Mean ‘Better Gold’ or a Bigger Bubble? QuickTake
– With the help of Matt Turner
(Updates with additional comments.)