Bitcoin hits record high, crosses $20,000 mark

Bitcoin, for the first time, has crossed the $20,000 mark recording another milestone that too in a pandemic-stricken year. The digital asset surged as much as 10 per cent to $21,293 in New York on Wednesday.

James Butterfill, investment strategist at CoinShares, highlighted that volumes last week were 70 per cent above the year daily average, suggesting greater participation in this rally than has historically been the case. He said its worth taking note that investors are beginning to see Bitcoin as a viable gold alternative. Michael Sonnenshein, managing director of Grayscale Investments, is not at all surprised that the cryptocurrency crossed the $20K mark. He described it as a ‘symbolic threshold’ to reach at the end of what has been a historic year for the digital asset.

Yoni Assia, CEO and co-founder of eToro, said $20,000 is undoubtedly a momentous milestone. “We have seen a significant shift in the demographic of those interested and invested in crypto. No longer the domain of just computer programmers and fintech advocates.” Jason Deane, an analyst at Quantum Economies, said increased institutional interest in bitcoin has led to an increasingly bullish narrative. “The race is on to secure bitcoin in a market of ever-dwindling supply. Its probably not too strong to say this is institutional fear of missing out and those organizations who have been looking to do this now realize they will have to move fast to secure it,” he explained.

Antoni Trenchev, co-founder and managing partner of Nexo, a crypto lender, told Bloomberg that a new line has been drawn in the sand – $30,000. “This is the start of a new chapter for Bitcoin. Its a narrative the media and retail crowd can properly latch onto because they have been noticeably absent from this rally,” he said.

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The dynamics support Bitcoin’s breakout, as per CNBC, have much more to do with the tidal wave of capital potentially pouring into the space, and has less to do with currency debasement. It highlighted that last week, big life insurer MassMutual announced it has purchased $100 million of Bitcoin. And with MassMutual considered to be a thought leader in the insurance industry, other insurers will follow suit, that is investment in Bitcoin.

In 2017, the highly sought after cryptocurrency passed the $5,000 mark.