Bitcoin Soars to a New All Time High As Institutional Buying Mounts

Cryptocurrency Bitcoin surged to a new all-time high of $19,857 on Monday, marking a 177% YTD return. The high was above the digital currency’s peak which was reached in December of 2017.

After a crash of 25% in March, the top cryptocurrency has come back roaring during the coronavirus pandemic. This is thanks in part to central government monetary easing and the uncertainty that led up to the U.S. presidential election.

“The Bitcoin correction didn’t last long, with the cryptocurrency having sights set on new highs once again, with $20,000 the ultimate goal in the short-term,” said Craig Erlam, a senior market analyst at Oanda. “A move into uncharted territory and the psychological boost that would come with a move like this could propel Bitcoin aggressively higher.”

The world’s most popular digital currency is now accepted by major investors, corporations, and governments. Especially in China.

BTIG strategists are saying that cryptocurrency has come of age, and bitcoin should reach $50,000 by the end of 2021.

Cameron Winklevoss, a cofounder of the crypto exchange Gemini, has said, “No other liquid asset in the universe can credibly offer this magnitude of asymmetric payoff in the next decade.”

Sergey Nazarov, the cofounder of Chainlink, projects that the price will eventually break $100,000 because the “digital gold” narrative seems to have normalized.

Nazarov cites that one factor to drive the price over $100,000 is rising inflation and the growing negative views of modern monetary policy. According to Nazarov, this leads people and institutions looking for alternative ways to preserve the value of their capital.

“Quite simply, the risk-reward equation is starting to flip from traditional financial assets being yield-bearing, less risky, and reliable stores of wealth resistant to inflation over to Bitcoin and various cryptoassets being the sources of yield, increasingly less risk, and a reliable store of wealth,” he said.

Wall Street firms have been warming up to bitcoin with two major payment companies, PayPal and Square also publicly welcoming it.

Grayscale Investments, the largest crypto investment firm, has topped $10 billion in assets in the Q3.

Grayscale’s Bitcoin Investment Trust (GBTC), a publicly traded fund to track the price of bitcoin, was cited this week by strategists at JP Morgan as a leading indicator of institutional sentiment.

“A failure by the Grayscale Bitcoin Trust to receive additional inflows over the coming weeks,” JPM strategists noted, “would cast doubt to the idea that institutional investors such as family offices have embarked on a trend of embracing bitcoin as digital gold replacing traditional gold as a long-term investment.”

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.