Bitcoin price has hit another record level of above $29,000 on the last day of the year 2020, indicating no signs of slowing down its wild December rally. The value of the leading cryptocurrency rose as high as $29,391 before slightly pulling back.
The digital asset has surged by almost 50% in December, on track for its biggest monthly gains since May 2019.
Matt Long, head of distribution and prime products at OSL cryptocurrency brokerage in Hong Kong, said:
“Key to this rally is that it has been sustained over several weeks. If we do see a break to the downside, it will be instructive on the direction of first-quarter flows whether we see institutions continue to buy on a potential dip.”
While the wider Bloomberg Galaxy Crypto Index showing that the biggest crypto asset is up to about 280% as the rival coin, Ethereum, has also rallied, the price of Bitcoin has quadrupled during last year amid the global COVID-19 pandemic.
The latest price increase continued to divide opinions between individuals who see the crypto asset as a hedge against inflation risk and dollar weakness, and others who question Bitcoin’s validity as an asset class given its boom-and-bust cycles and speculative nature.
Vijay Ayyar, head of business development at Luno cryptocurrency exchange in Singapore, said:
“Lots of things are being validated in my view, including Bitcoin’s role in finance and as a store of value. Bitcoin is now a real alternative.”
The huge rise in Bitcoin price during December has also at least one technical indicator flashing red, signaling the largest cryptocurrency is “close to a top”, Ayyar, stated. According to the Relative Strength Index crypto indicator, Bitcoin is well into overbought territory.
American Investors Flocking to Cryptocurrency
The massive Bitcoin price hit all-time in December has been majorly driven by U.S institutional investors and professionals who view it as a safe haven asset against a weakening dollar and a payment method gaining mainstream acceptance. Retail investment in the cryptocurrency has also been rapidly increasing.
A sudden influx of interest among North American institutional investors is driving shifts in Bitcoin trading. The shift in embracing the cryptocurrency is normally dominated by Asian investments – especially countries such as South Korea, Japan, and China.
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