Bitcoin, after charging into December, has hit something of a brick wall—stopping just short of fresh territory north of $20,000 per bitcoin.
The bitcoin price has added an impressive 160% since January, helping smaller cryptocurrencies ethereum, Ripple’s XRP, litecoin and chainlink make triple-digit gains through the year.
Now, with traders gearing up for a so-called Santa rally in last week before Christmas, bitcoin, ethereum, Ripple’s XRP, litecoin and chainlink investors are hoping holiday season cheer will help them finish the year on a high.
Bitcoin has been bouncing around under $20,000 since early December, climbing along with stocks and most other assets as governments continue to flood global markets with stimulus designed to fight the coronavirus-induced economic shock.
“Given that bitcoin has been moving up or down 2.4% a day on average during the last two months, breaching $20,000 by Christmas is reasonable,” cryptocurrency trader and economist Alex Krüger said via Telegram, adding he “favors upwards continuation” despite recent “regulatory concerns” in the U.S. encouraging sellers and “a notable increase in selling pressure from [bitcoin] miners [who are rewarded with bitcoin for maintaining and securing the network].”
The bitcoin market was spooked last month when the chief executive of San Francisco-based bitcoin and cryptocurrency exchange Coinbase warned he’d heard rumors that the U.S. Treasury Department could rush out new regulations regarding self-hosted crypto wallets before President Donald Trump’s term ends in January.
“Such regulatory changes should not impact institutional interest negatively,” Krüger added. “Financial markets are likely to remain risk-on, while the Federal Reserve should reassure markets on Wednesday about its long-term dovish stance and MicroStrategy is about to deploy $650 million into bitcoin.”
This week, U.S. business intelligence company MicroStrategy announced it raised $650 million via bond sales to buy more bitcoin—expected to take its holdings to over $1 billion—triggering a fresh wave of bullishness among crypto investors.
“We’ll break $20,000 [before Christmas],” said Ryan Selkis, the chief executive of bitcoin and cryptocurrency data company Messari, who is confident “the market will shrug off the regulation proposal from [U.S. Secretary of the Treasury] Mnuchin,” and MicroStrategy’s huge bitcoin bet, along with “funds hammering the Grayscale trade” will “keep the rally going.”
Crypto asset manager Grayscale has seen investment of $2 billion since October, it revealed this week, suggesting institutional investors are piling in as the bitcoin price has climbed.
Bitcoin has already doubled in price over the last six months, adding over $250 billion to the combined value of the world’s cryptocurrencies as top five tokens ethereum, Ripple’s XRP, litecoin and chainlink ride bitcoin’s coattails, and some in the cryptocurrency community are more focused on what the new year will bring than bitcoin’s short term price performance.
“Will bitcoin crack $20,000 by Christmas? I wouldn’t take the opposite side of that bet,” Cory Klippsten, the chief executive of U.S.-based bitcoin buying app Swan bitcoin said via Telegram, who said Swan’s revenue is up more than three-fold month-over-month in November, and “on pace for another record high in December.”
“But the real fun is reflecting back on the full year of 2020 and thinking about the incredible adoption we’ve seen from huge names like Stanley Druckenmiller and Paul Tudor Jones, and public companies like Square
Jones, the legendary billionaire hedge fund manager known for his bets on interest rates and currencies, set the bitcoin and cryptocurrency market alight in May when he revealed thought bitcoin was the “fastest horse” in the coming race to beat inflation. His public support kicked of a wave of big-name investors betting on bitcoin, including billionaire U.S. investor Druckenmiller, who revealed in November he now owns some bitcoin—saying he’s “warmed up to” the cryptocurrency as a store of value.
“2020 is the year bitcoin went mainstream, and 2021 is the year everyone realizes that fact and plays catch-up,” Klippsten added.