Bitcoin on longest monthly winning run since 2019 after topping $28,000

Topics Bitcoin | cryptocurrency

It’s been a tough year by all accounts. But for Bitcoin, 2020 has been a marvelous time.
Bitcoin is on track for its longest monthly winning streak in more than a year after touching a record above $28,000 over the weekend.

 

The largest cryptocurrency reached an all-time high of $28,365 on Sunday before paring some of the advance, according to a composite of prices compiled by Bloomberg. The run of outsized returns over October, November and December so far is the longest such stretch since mid-2019.

 

“My sense is we’re very close to a top — we could hit $30,000 though,” said Vijay Ayyar, head of business development with crypto exchange Luno in Singapore. “We should definitely see a pullback, but the magnitude is probably lesser. We might only see 10 per cent to 15 per cent drops.”

 

It’s been a tough year by all accounts. But for Bitcoin, 2020 has been a marvelous time.

 

The cryptocurrency almost quadrupled, surpassing $20,000 for the first time as it notched record after record. The diehards cheered it as an inflation hedge in an era of unprecedented central bank largesse. Wall Street veterans from Paul Tudor Jones to Stanley Druckenmiller blessed it as an alternative asset, adding to the rally. And companies like MicroStrategy and Square moved cash reserves into crypto in search of better returns than near-zero interest rates deliver.

 

While none of those reasons for buying Bitcoin comport with its origins as an alternative to fiat currencies, they do point to a growing acceptance of crypto as an asset class of its own. And that has the zealot-like community taking yet another victory lap in their quest for legitimacy. “What’s happening now — and it’s happening faster than anyone could ever imagine — is that Bitcoin is moving from a fringe esoteric asset to the mainstream,” said Matt Hougan, chief investment officer of Bitwise Asset Management.

 

“If it’s going mainstream, there is just so much money on the sidelines that is going to have to come in and establish a position that it leaves me very bullish for 2021.”

 

But with Bitcoin capturing greater attention, it could also garner further scrutiny from regulators, says Guy Hirsch, managing director for the U.S. at online-trading platform eToro. “Despite this meteoric rise, there are some storm clouds on the horizon,” he said, including the fallout from several last-minute actions by the outgoing Trump administration, among others.

 

Predicting where it will go is a fraught exercise. Many left the coin for dead after its 2017 rally resulted in a crash the following year, a stretch of time sometimes referred to as the “crypto winter.”

 

But it’s surged more than 300 per cent in 2020 and many investors say it could continue to gain next year. What else is on the radar? To Meltem Demirors, chief strategy officer at digital-asset manager CoinShares, there are some concerns about what the incoming Joe Biden administration might mean for the crypto space.

 

Going forward, many strategists and investors say, the industry could see more scrutiny and tighter regulation with Biden in the White House.



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