Bitcoin has hit a new all-time high with a recent price push past the $20k mark. However, less than 24 hours after its push past $20k, BTC is already more than halfway toward the $25,000 milestone.
According to data from CoinMarketCap, BTC first crossed over the $20,000 mark on Wednesday, December 16th around 14:00 UTC. At press time, the price had increased past $22,829.95, and appeared to be continuing along its way up.
BTC has been close to crossing the $20,000 line for over a month. However, a number of analysts described $20k as a “psychological” barrier to Bitcoin’s further progress; a line in the sand that was arbitrarily drawn as a sort of milestone for whether BTC would “make it big” or not.
BTC above $18,000 “is itself confirmation that investors believe in the model and the underlying technology.”
Indeed, Micah Erstling, cryptocurrency trader at Palo Alto-based investments firm GSR, told Finance Magnates that “Bitcoin breaking $20,000 is a significant psychological milestone, and that “many of the early investors who held on through the bear markets in 2017 and 2020 will feel vindicated.”
Erstling also said that the fact that Bitcoin has been able to sustain levels above $18,000 “is itself confirmation that investors believe in the model and the underlying technology.”
Furthermore, “we’re fast approaching a tipping point where more institutions make allocations as an inflation hedge,” he said. “Each new big-name instills further confidence in the market.”
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“These institutional allocations feel more like strategic moves than they do FOMO.”
And indeed, a growing number of institutional investors have made significant investments in Bitcoin in recent months: Stone Ridge bought $115 million in BTC; Square bought $50 million. Microstrategy has invested a total of $1.1 billion in Bitcoin in recent months.
“These institutional allocations feel more like strategic moves than they do FOMO,” Erstline told Finance Magnates. “Investors are giving serious consideration to the idea that Bitcoin may usurp gold as a store of value.”
Indeed, the narrative that describes Bitcoin as a “store of value” asset has become increasingly popular in recent months as the United States prepares for another round of economic stimulus. Many analysts believe that the inflation that the previous round of stimulus and quantitative easing that came with it could sink the USD to its lowest point in years.
Is $30k next?
Therefore, many believe that Bitcoin passing the $20k mark isn’t the end of BTC’s bull run–it’s just the beginning.
“For those that are just entering the market, like Mass Mutual, there is still plenty of room to run,” Erstling said.
“As we’ve seen in recent months, the upside momentum is gradual, not explosive. The Dollar is getting weaker and the market has a gloomy outlook for the greenback in 2021. Economic stimulus is on the table in nearly every major Western economy.”
Therefore, “investors are continuing to look for new sources of returns, as stocks and bonds get crowded,” he said. Bitcoin and other alternative assets could have much room to grow.