Bitcoin Blasts Past $34K for First Time, Hours After Blowing Through $30K
The price of bitcoin (BTC) surged past $34,000 for the first time ever early Sunday morning, extending a record-setting holiday rally and adding an immediate exclamation point to the Bitcoin Network’s 12 year anniversary.
Bitcoin was trading hands around $34,400 at 02:30 EST Sunday. Hours earlier, the leading cryptocurrency had sliced through $30,000 like a light saber through gossamer, a torrid start to the year.
Once the price of the leading cryptocurrency crossed the $30,000 mark for the first time — something it had struggled to do for the last couple of days — it exploded upwards like a ball released under water, reaching a new all-time high of $33,136.92 and then continuing the push, breaching $34,000 hours later.
“Bitcoin makes TSLA (Tesla) look like it is standing still,” tweeted Jim Bianco, well-known macro strategist, shortly after the cryptocurrency broke $30,000.
The latest gains come two days after bitcoin closed out a year in which the cryptocurrency rose more than 300%, with an almost 50% gain in December alone, sort of like a boulder gaining speed downhill, only in the opposite direction. On Nov. 30, bitcoin breeched a nearly three-year-old high of $19,793. By the close of Dec. 31, the cryptocurrency had risen about $10,000.
Propelling the record-setting run is a growing narrative that bitcoin represents a form of “digital gold,” along with a flood of institutional investors into the cryptocurrency: Among them: Anthony Scaramucci’s Skybridge Capital ($182 million in December); MassMutual ($100 million in December); and Guggenheim (up to 10% of its $5 billion macro fund).
“Bitcoin price is being driven by institutional money and there is not enough supply,” Laurent Kssis, managing director at 21Shares, told CoinDesk. “The number of family offices asking to invest in our ETP is just staggering. I’ve never seen this before. In 2017 it was just retail knocking at the door now it’s only institutional.”
Kssis’ statements are borne out by the fact that the number of whale entities – clusters of crypto wallet addresses held by a single network participant holding at least 1,000 bitcoin – rose to a new record high of 1,994 this past Wednesday.
The metric increased by over 16% in 2020 and 7.3% in Q4 alone.
“The final land grab has started, and by this time next year, accumulating >1,000 Bitcoin will be nearly impossible for most people,” Jehan Chu, CEO at Hong Kong-based trading firm Keneti Capital, told CoinDesk.
HODLers also have the U.S. Federal Reserve to thank for the cryptocurrency’s rise, as it, along with other central banks, has been printing money with abandon, trying to stave off the worst economic effects of the pandemic. This is viewed by many as a potential catalyst for inflation and bad for the U.S. dollar, both of which could be positive for bitcoin.
“Many corporations are parking USD in BTC because they are losing money in conventional banking so it makes total sense,” 21Shares’ Kssis said.
Growing global macro uncertainty may also be playing a factor in the recent surge. A peaceful transition of power in the U.S. is no longer the iron clad guarantee it used to be as 11 GOP Senators say they’ll vote to reject the electors from certain states. While it’s still almost certain President-elect Joe Biden will assume office later this month, the need for a qualifier is a new event.
That plus a mutated strain of COVID 19, a lagging world economy, and concerns over the effects of the now-completed Brexit, may not be helping the zeitgeist, but could be aiding bitcoin which some see as insurance against global chaos.
Bitcoin may also be benefiting from money being moved out of the XRP token and so-called privacy coins which are facing legal and regulatory challenges.
With a market value now of over $595 billion, bitcoin is more valuable than all but nine publicly traded companies, sitting between Alibaba at $648.3 billion and Berkshire Hathaway at $543.7 billion.
Bitcoin enthusiasts will likely find some joy in that last bit, an event that occurred last week, as the Berkshire’s CEO, legendary investor Warren Buffett, once famously derided bitcoin as “probably rat poison squared.”
The cryptocurrency has also rose up the ranks of the world’s most valuable currencies, overtaking the Saudi Riyal into 17th place, just behind the Mexican Peso.
UPDATE (Jan. 2, 14:26 UTC): Updates coin activity.
UPDATE (Jan. 2, 16:50 UTC): Updates to reflect new record.
UPDATE (Jan. 2, 19:14 UTC): Updates to reflect new record, adds analyst quotes.
UPDATE (Jan. 2, 21:01 UTC): Updates coin activity.
UPDATE (Jan. 3, 00:18 UTC): Updates coin activity.
Related: Bitcoin Suddenly Drops 13% as Altcoins Continue to Rise
UPDATE (Jan. 3, 2:41 EST): Updates coin activity.
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