Bitcoin has come back to life this month after a period of stagnation since the summer.
The bitcoin price has shot up by around 20% through October, climbing to year-to-date highs of $13,230 per bitcoin on the Luxembourg-based Bitstamp exchange, and giving long-suffering bitcoin bulls cause for celebration.
Bitcoin’s latest surge was sparked by news that payments giant PayPal
“2020 is fast becoming the year of crypto acceptance and we see 2021 as the year of mainstream adoption,” Constantin Kogan, managing director at digital asset manager Wave Financial, said via email. “All of this is bullish for the price of bitcoin and it’s safe to assume that bitcoin will remain a strong bullish trend. We believe a year-end price beyond $14,000 is easily achievable as the market hasn’t fully absorbed all the positive news.”
Ahead of PayPal’s announcement, bitcoin had already begun to climb this week, boosted by remarks made by the chairman of the Federal Reserve, Jerome Powell, on digital currencies and by renewed hopes of a fresh stimulus deal.
“It will also be interesting to see how any news regarding a fiscal stimulus package in the U.S. affects bitcoin prices, given the crypto-asset’s recent high correlation with US stock markets,” Simon Peters, analyst at brokerage eToro, said via email, adding “investors should look to $14,000 as the next target, a high not seen since June 2019.”
Bitcoin’s recent good fortunes have invoked memories of 2017’s end-of-year surge to all-time-highs of around $20,000 per bitcoin.
“There’s a growing sense that we’re set to experience a mini-boom similar to that at the end of 2017,” Nigel Green, chief executive of deVere Group, said via email. “Prices are yet to catch-up with investor interest—but this is only a matter of time as investors will not want to sleepwalk towards perhaps year-high prices in the run-up to the end of 2020.”
However, sudden surges are often followed by sharp corrections—with some traders and investors warning that a return to volatility could be around the corner.
“It’s promising to see bitcoin holding above the $12,000 mark with continued institutional interest and wider regulated adoption taking place,” Micah Erstling, trader at market maker GSR, said via email, pointing to Federal Reserve chairman Jerome Powell’s speech on central bank digital currencies earlier this week and payments company Square’s
“Volatility has been extremely low but there has been positive price action given the recent attention. With continued macro uncertainty amidst Covid-19 and the U.S. presidential election around the corner, we can expect increased volatility.”