On December 16, 2020, the most prominent cryptocurrency, Bitcoin (BTC), revisited the USD 20,000 level after a rough three-year journey.
Two months later, on February 16, 2021, BTC has breached the USD 50,000 zone for the first time in its history on signs of strengthening demand. (Updated at 13:03 UTC with an announcement by MicroStrategy. Updated at 13:45 UTC with the latest market data. Updated at 14:01 UTC with a comment from Eric Wall and new reactions.)
At 13:43 UTC, Bitcoin trades at USD 49,086, sinking from its new all-time high of USD 50,350 breached today, per Coingecko.com. The price is still up by almost 3% in a day and 47% in a week. It rallied by 35% in a month and 396% in a year. As volatility developed today, in the past 4 hours, USD 167m worth of BTC trading positions were liquidated, per bybt.com.
BTC price chart:
“In the institutional space, I expect this milestone and the recent Tesla investment to break the mold for many corporate copycats. A psychological barrier remains for the retail despite Bitcoin’s divisibility, but I reckon this will soon be dispelled too as cryptocurrencies edge closer to mass adoption,” Antoni Trenchev, Co-Founder and CEO of primary crypto lender Nexo, stated in an emailed remark. He forecasted that BTC would hit USD 50,000 by end-of-year.
Meantime, one of the most bullish non-crypto corporations, US-based software developer MicroStrategy announced today it once again plans to acquire up to USD 690m and spend it on BTC. At the end of January, the firm owned nearly BTC 70,784 (currently USD 3.5bn).
Furthermore, as cited by Adam Liposky, Ecosystem Operations Lead at sPocket Network, a blockchain data ecosystem for Web3 applications, this bull run “is illustrative of the widespread adoption of initial blockchain implementations, typified by Bitcoin and Ethereum.”
“This is just the beginning,” he stated.
However, as reported, Philip Gradwell, Chief Economist at Chainalysis, said recently that this rally is due to an expectation of future mass adoption rather than actual mass adoption today.
“People are trying to get in before this expected adoption and they are buying in a market with very constrained supply, so prices are climbing. If adoption materializes then this will be a good bet, but if it does not then the market could turn,” he stated.
McGlone, a commodity strategist at Bloomberg Intelligence, claimed that BTC volatility is anticipated to remain rising in the near term and remain elevated until it reaches around its next plateau. The strategist told Bloomberg that USD 100,000 per BTC “may be a longer term target.”
Meantime, Eric Wall, Chief Investment Officer of the crypto hedge fund outfit Arcane Assets, claims that USD 50,000 is a fair price for bitcoin.
“At USD 50,00, it’s still below 10% of gold’s total market capitalization. Given bitcoin’s current seat in the world, its progress as an investment class, and all its associated risks, it seems fair. It’s neither low nor euphoric,” he stated, adding that with the M2 money supply rapidly expanding, bitcoin would have to be sort of unique to remain only “fairly” 1valued and not priced at a premium.
“We’re probably going even higher. It’s not very pricey given general market froth. And there doesn’t seem to be any reason why we’d top out before we’d reach a point of extreme froth. Especially not for an asset like bitcoin, the king of froth and speculation,” Wall stated.
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