Here’s another interesting piece of news from the real world of cryptocurrencies and the world of the real economy…
The Bitcoin rally continues (at least at the time of writing), but as always, there is still controversial information about both price and world-wide adoption.
Traders (those who speculate on price pumps / dumps) are divided into two camps. The first common opinion is: “Never sell (“short”) bitcoin in a bull market …” while the other says: “A price correction is close and it will be significant, be prepared…“, nobody knows for sure if the first or second camp is correct, but next month should give us some perspectives i guess..
Bitcoin rally ‘blows-the-doors-off prior bubbles,’ Bank of America says
The world’s most popular digital currency slid to as low as US$36,618.36 on Bitstamp exchange before bouncing back. Rival cryptocurrency ethereum rose three per cent after sinking more than 10 per cent.
Bitcoin has rallied nearly 1,000 per cent since a low in March. It topped US$30,000 for the first time on Jan. 2, after surpassing US$20,000 on Dec. 16.
Some market participants had warned of a correction after the US$40,000 milestone was reached, but bitcoin was poised to register it’s 11th session of gains out of the last 12.
Increased demand from institutional, corporate, and more recently retail investors has powered bitcoin’s surge, attracted by the prospect of quick gains in a world of ultra-low yields and negative interest rates.
“We are seeing a continued demand spike driven largely by sustained and unprecedented institutional interest, showing no sign of abating as we move into 2021,” said Frank Spiteri of digital asset manager CoinShares.
JPMorgan strategists wrote on Jan. 5 that the digital currency has emerged as a rival to gold and could trade as high as $146,000 if it becomes established as a safe-haven asset.
Interest in the world’s biggest cryptocurrency soared last year, with investors viewing bitcoin as a hedge against inflation and an alternative to the depreciating dollar.
Bank of America investment strategists on Friday said “violent” inflationary price action in markets helped bitcoin’s rally in the last two months.
But it warned that the cryptocurrency “blows-the-doors-off prior bubbles,” such as the dotcom bubble in the late 1990s, China in the 2000s and gold in the 1970s.
(Reporting by Kevin Buckland and Thyagaraju Adinarayan, additional reporting by Tom Wilson; Editing by Himani Sarkar and Hugh Lawson)
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