Bitcoin remains hot even as it went down after posting $61,742 over the weekend. As of Monday, the world’s most popular cryptocurrency is trading at $60,031.90. In fact, it’s more than doubled since the start of 2021, and up 119.2% from the year’s low of $27,734 on January 4. The cryptocurrency broke $60,000 less than a month after breaking the $50,000 barrier.
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However, skeptics find bitcoin too volatile for investors to stockpile. Right now, the cryptocurrency has nearly no use-value. As such, it makes the currency prone to collapse. Proponents argue that this crypto frenzy period is different. This time, big-name firms supported the price and added their approval to Bitcoin’s legitimacy.
Anticipation of Stimulus Relief
Bitcoin eased back after scaling $61,000 over the weekend. Prices went up in anticipation that some relief payment recipients will be joining earlier investors. Over the past year, Bitcoin climbed more than 1,000%. Increased interest for the cryptocurrency pushed demand higher.
Chris Weston, research head of Pepperstone Group Ltd noted that crypto is experiencing good flow. Traders are front running US stimulus checks, Weston wrote in a note. However, Bitcoin needs to remain higher than its previous high of $58,000 to maintain the current bullish status.
Institutional Interest, Not Retail-driven Surge
Today’s Bitcoin surge is different from the 2017 version. According to Goldman Sach, Matt McDermott, global head for digital assets, institutional interest is driving demand this year. In contrast, 2017 gains resulted from a retail-driven demand. McDermott reported that his team saw a “huge volume” of institutional demand from across industries. In fact, McDermott reported over 300 conversations on cryptocurrency with various institutional clients. This includes hedge funds, asset managers, banks, corporate treasurers, insurance, and pension funds.
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Most of these conversations focus on Bitcoin and how they can get a piece of the pie. For example, corporate treasurers ask if they should add Bitcoin to their balance sheets. This question started circulating soon after Tesla invested $1.5 billion in Bitcoin. In addition, general concerns about asset devaluation also led to heavier institutional demand. Bitcoin’s fixed supply positions it as a hedge against inflation, crypto enthusiasts say.
More Big Names Joining As Bitcoin Remains Hot
Apart from stimulus anticipation, Bitcoin also received a boost as more institutions piled into the crypto. Last March 9, JPMorgan launched its ‘crypto exposure’ product, where it features a basket of companies with substantial investments in cryptocurrency. The basket will feature Bitcoin stalwarts MicroStrategy and Square. Prior to JPMorgan, NYDIG managed to raise $200 from both Morgan Stanley and Soros Fund management to support their crypto undertakings.
Meanwhile, popular Chinese photo retouching app Meitu announced it bought around $22.1 million worth of ether. In addition, Meitu also bought $17.9 million worth of Bitcoin. Then, Goldman Sachs announced it would restart its crypto desk and begin dealing bitcoin futures and non-deliverable forwards for clients beginning this month. CEO John Waldron said that with client demand rising, they reopened the desk to provide for the 40% of GS clients with crypto exposure.
Can Bitcoin Reach 100,000 this year?
Bitcoin held its $60,000 price steady over the weekend even with small hiccups. It is now up over 22% in the past seven days. Even more incredible, it is now double its early January rate of $30,000. This signals that more and more institutions now see Bitcoin in a different, more acceptable light. Some analysts foresee Bitcoin reaching $100,000. However, investors should not expect it to zoom upwards nonstop. Instead, look for its climb to go and up like a wild roller coaster ride.
Bitcoin’s rise is having an effect on its fellow cryptocurrencies. By Sunday, Etherium trades at $1,874, rising 13% over the past week. Also, Binance Coin went up 18% in the same time period to $268.65, while Polkadot gained more than 10% at $37. In addition, Uniswap climbed over 1% as well. hitting $31.36 on Sunday. Meanwhile, the most stable coin among the cryptos, Tether, remains pegged to the US dollar.
Watch the Investing Assist video reporting that bitcoin reached $60,000 Sunday:
Do you agree that Bitcoin’s rise this year is different from the 2017 run? Do you think it will reach $100,000 this year? Let us know what you think about Bitcoin and cryptocurrency in general. Share your thoughts in the comments section below.