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November 30, 2020
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Bitcoin

Bitcoin has climbed above $ 18,000 today, something we haven’t seen since December 2017

With Bitcoin rising above $ 18,000 to trade near historic highs, the cryptocurrency has already appreciated more than 50% in 30 days

Bitcoin rose to over $ 18,000, close to the record set three years ago, but some analysts have warned that additional gains would leave the price “screaming” for a major correction.

On Wednesday, Bitcoin traded at $ 18,492 (€ 15,578), after an explosive run in which it jumped more than 50 percent in 30 days, Refinitiv data shows. Bitcoin peaked in December 2017 at $ 19,458, before suffering a spectacular drop that left the market dormant for years.

This time, Bitcoin could reach new records, according to Joel Kruger, exchange analyst at LMAX Exchange, who said that if that happens, prices could be underway for a sharp drop. Traders say the volatility remains high.

“We would warn against buying at current levels, with the market operating so far and fast,” said Kruger.

“The market may want to rise above the record, but if it does, it will leave the price … screaming for a major correction.”

Prices plummeted in March, when coronavirus-induced liquidation hit financial markets. But the exchange rate has been on the rise ever since, rising 380 percent since this year’s low.

Traders said the recent rise was supported by an increasing number of professional investors, such as hedge funds, who became active in cryptocurrency trading, attracted by the potentially high returns.

Specialized hedge funds focused on the bitcoin trade have significantly outperformed their peers in traditional markets, achieving almost 89% return since the beginning of the year, according to data provider Eurekahedge. The main hedge fund index returned just over 3%.

Credibility

PayPal’s decision to adopt cryptocurrencies has also reinforced the market’s credibility, according to George McDonaugh, co-founder and managing director of blockchain investment firm KR1, while large, well-known investors have also accumulated recently.

Jan Stromme, managing partner of the crypto trading company Alphaplate, said traditional investors’ interest was “very high and shows no signs of abating.”

“Traditional investors are increasingly thinking that cryptocurrencies are a maturing market and see this as an opportunity to diversify and trade beyond traditional assets,” said Stromme.

Elie Le Rest, a partner at ExoAlpha, a specialized asset manager based in Paris, said the recovery this time seemed more sustainable than the race in 2017, when retail investors were the majority of market participants.

“Institutional investors are now taking a stand on Bitcoin,” said Le Rest.

Source: Irish Times

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