Bitcoin jumped to another high point on Wednesday, with extreme swings continuing to affect the world’s largest cryptocurrency.
The famous volatile digital currency advanced as much as 6% to $ 35,842, exceeding the previous high set on January 3, and was trading at $ 34,988 at 6:47 am in New York. It fell by 17% on Monday. Bitcoin quadrupled in 2020.
A number of factors have been cited for the rise of Bitcoin, showing how difficult it is to pinpoint the next cause for the latest outbreak of volatility. Some traders pointed to a long-term price for JPMorgan Chase & Co. forecast of up to $ 146,000, while others cited the overall risky climate in global financial markets.
“Clean up the bull market, and we are not going to see a 30% to 40% drop as in 2017,” said Vijay Ayyar, head of business development with crypto exchange Luno in Singapore. “The market is more mature and with larger buyers. However, remember that we are in a parabolic phase and they reach the limit. “
While the latest price swings may be reminiscent of the bullish and bearish cycles of the past, Bitcoin’s ability to reverse its decline so quickly this week suggests that institutional investors are not abandoning space, said Matt Long, head of distribution and core products of the Hong Kong crypto broker OSL.
“Monday’s drop was instructive, as institutional investors took the opportunity to buy,” he said. “Institutional investment is firmly in the digital assets sector and is potentially accelerating.”
More institutions and noticed Investors, from Paul Tudor Jones to Scott Minerd and Stan Druckenmiller, have either started allocating funds in Bitcoin or said they are open to doing so.
‘Chase Higher’
“The bullish search is based on the notion that the biggest street investors are interested in building long-term positions,” said Stephen Innes, Axi’s chief global market strategist. “It all has to do with the adoption of the new era of blockchain technology to which Bitcoin is uniquely interconnected.”
Some argue that cryptocurrency offers protection against the weakness of the dollar and the risk of inflation in a world flooded by fiscal and monetary stimulus.
“If inflation increases, or even does not increase, and more companies decide to diversify a small part of their cash balances into Bitcoin instead of money, then the current relative flow in Bitcoin would become a torrent,” Bill Miller of Miller Value Partners LLC wrote a blog post.
But others say that retail investors and trending money funds are pumping an unsustainable bubble.
“Bitcoin is better at being gold than gold at being gold,” said Anthony Scaramucci, founder and managing partner of SkyBridge Capital, in a interview Tuesday. The company is the latest to join the Bitcoin movement, launching a crypto-centric fund this week.
Read More: Does Bitcoin Boom mean ‘Best Gold’ or bigger Bubble? QuickTake
– With the help of Matt Turner
(Updates with additional comments.)