Bitcoin leaped to its highest height on Thursday, surpassing $22,000 for the first time to make 2020 its best year so far.
The crypto giant had a rough early year, tumbling through the first and second quarters of the year while gold thrived amidst the heat of COVID-19.
Since the bitcoin halving in May, the digital coin has been relentlessly trying to prove its worth to investors looking for a safe haven from the pandemic’s economic storm. The digital coin started recording a surge after it has consistently recovered from areas where corrections were expected.
On Wednesday, the world largest coin made a giant over 10% leap to over $23,700.92 in New York to vindicate earlier projections, thanks to Wall Street big names crowding into the asset.
Bitcoin’s rally to its best performance this year has attracted investors who were looking for a safe haven against the pandemic, and thus propelled further forecasts of higher price for the digital gold.
“We have a new line sand and the focus shifts to the next round number of $30,000,” said Antoni Trenchev, cofounder and managing partner of Nexco, a crypto lender. “This is the start of a new chapter for Bitcoin. It’s a narrative the media and retail crowd can properly latch onto because they’ve been noticeably absent from this rally.”
Investors expect the cryptocurrency to reach its all-time high, the $20,000 2017 peak in December.
Last month, Citibank executive, Tom Fitzpatrick said bitcoin will trade at $318,000 by the end of 2021. Though he admitted the prediction seems improbable, but there is a new wave of investor interest to drive the surge.
Fizpatrick said the surge will be the weakest rally for the digital asset when compared to other assets such as gold. In his argument, bitcoin is all about the “unthinkable rallies followed by painful corrections,” which means, it will likely see huge price swings before finally settling at the predicted price.
In March, bitcoin crashed, losing 25% and leaving investors in doubt about its strength to withstand a global crisis. Over $26 billion was wiped off the cryptocurrency market in 24 hours.
But it picked up again, winning the interest of doubting investors including some Wall Street firms. Twitter CEO Jack Dorsey among other big shots in the tech industry threw weight behind the coin with multi-million dollar investments.
Demand for its perceived quality as an inflation hedge and expectations of mainstream acceptance have become other factors aside corrections, driving its rally.
The interest spurred bitcoin to further growth as many investors spurned gold. In November, the coin hit $18,000 and has kept smashing its previous peaks.
Other coins have kept growing along bitcoin. Ether, the second largest digital coin, also rose as much as 6.9%, according to data published by Bloomberg. It was so much that Coinbase, a cryptocurrency exchange said it was experiencing congestion issues and delays in sending the token.
Bloomberg reported that the rally came as CME Group Inc., announced that it plans to expand its suite of cryptocurrency derivatives offerings to include Ether futures beginning in February.
The chief strategy officer at Coinshares, Meltem Demirors said bitcoin’s surge above $20,000 will pave way for further growth.
“The biggest thing is the macroeconomic conditions – this is the perfect setup for Bitcoin. From here things are going to move very quickly and I wouldn’t be surprised if we touched $35,000 in the next three to six months,” she said.
Bitcoin has surged 170% this year.
The contagious excitement about the digital asset’s growth is fuelling a massive flow of coin to North America from East Asia, as more investors embrace bitcoin.
“While this is a major milestone for this nascent asset class, as retail, institutional, and blue-chip investors alike allocate more capital to this space, it would not be surprising to see other coins follow in BTC’s footsteps and for this upward trajectory to be sustained into 2021,” said Scott Freeman, co-founder & partner at trading firm JST Capital.