Bitcoin Breaches $30,000 Mark As Rally Extends Into 2021
While traditional markets were sleeping, Bitcoin welcomed the new year with a record-breaking rally over the first weekend of 2021, it passed the $30,000 mark for the first time ever and investors are preparing for an intensive 2021.
The cryptocurrency is infamously volatile, and concerns remain after setting a new record above $33,000 on Saturday when prices dropped sharply to $27,630 before recovering to near $30,500 on Monday. But after closing out 2020 with gains of more than 300%, a growing number of traders searching for yield in a low-interest-rate world are giving Bitcoin another look.
Despite the onset of a devastating pandemic in 2020, a flood of support from central banks and governments gave investors the confidence to look toward the economic boom expected to follow the Covid-19 recession. According to Deutsche Bank, 28 out of 38 non-currency assets it tracked posted positive returns over the past 12 months.
"The currency will be on the road to $50,000 probably in the first quarter of 2021," said Antoni Trenchev, managing partner and co-founder of Nexo in London, which bills itself as the world's biggest crypto lender. Bitcoin is the most valuable and popular out of a range of digital currencies and some have suggested it could pass $100,000 this year, but some dismiss such predictions as bizarre.
Bitcoin's reputation has grown considerably in recent months by big-name investors that have named bitcoin as an emerging inflation hedge. According to recent surveys, young people are motivated and far more inclined to buy cryptocurrencies, including Bitcoin and Ethereum than older groups.
As Bitcoin rockets sky-high, cautious traders are pondering the possibility of a 30% pullback, just like those seen in previous bull rallies, however, a move like this could take Bitcoin down to $24K, but it may be neutralised by strong buying pressure from established players.
Still, Bitcoin remains a major gamble as it is very much an ‘unchartered waters’ asset and we simply have not experienced this before. An asset that goes up should raise alarm bells for investors so there are reasons to be cautious.
No one knows for sure the short, medium, and long-term future for Bitcoin. But the blockchain technology that underpins it is ground-breaking and is already altering the way the world controls money.
Bitcoin’s rally this week has confirmed without a doubt that the already substantial marketplace for cryptocurrencies is growing and is likely to grow at a faster pace in the future.