Industry News Bitcoin Breaks its previous Price Record!

Bitcoin Breaks its previous Price Record!

December 2, 2020

After almost three years of anxious waiting, bitcoin has finally broken its previous token price record. Now, bitcoin investors are able to celebrate a brand new price that reached its all-time high. This took place on Monday when the biggest cryptocurrency in the world reached 19,786 USD and thus managed to overcome its old record by a minuscule but essential difference of 3 USD. Ever since the start of the bitcoin network, the investors who decided to play the long game experienced more than a single bearish cycle. 2018 alone brought about what is now known as the Crypto Winter.

But, the recent record-breaking moment is demonstrating the validation of their initial investment. It comes about as the wider cryptocurrency domain continues to showcase resilience to environmental and market circumstances that have arguably never been worse in the last 10 years of bitcoin’s existence. Now, even traditional market analysts agree that the present jump in the price over the record level should not be underestimated. Because of this, public showcases of skepticism from all quarters must face reality where crypto is showing its staying power despite a long list of hurdles it regularly faces. There is no better testimonial to the revolutionary nature of these decentralized cryptocurrency networks and their seemingly very lasting potential.

Strong Tailwinds

Naturally, the present record-breaking climb did not happen in a vacuum. Instead, a range of favorable macroeconomic elements influenced it. These include an unprecedented period of spending brought about by many central banks around the globe. The same spending spree is designed to help the world combat the economic slowdown that came about from the global COVDI-19 coronavirus pandemic. Thanks to that, many investors in bitcoin see this cryptocurrency as a digital asset that can help them hedge against potential rises in inflation.

Thus, their crypto funds are a guarantee against strong losses in their funds because of the monetary policy of any individual nation. Thanks to this, bitcoin gained 167 percent year to date on the day it broke its old record. Counting the same numbers from the moment in March when it lost more than 50 percent of its value, the cryptocurrency network rose more than 400 percent. This is a comeback on a scale that otherwise takes place only in domains like esports competitions.

Increasing Market Correlation

In the wake of the rise in price, there is another interesting fact about bitcoin and its future perspective. Right now, the correlation between bitcoin price and the traditional market is at 0.4, which is somewhat strong. That is a direct contradiction to the longstanding narrative which painted bitcoin as an asset that is completely unrelated to any of the global and well-known traditional markets.

Now, having in mind that regular markets suffer frequent outages, which makes new investors openly question any reliability in the market data overviews, the crypto market began to mature. It also presented itself to investors as a growing valid alternative to any traditional counterparts. On the other hand, the same growing closeness is not in any shape or form compromising the basic setup of fairness and decentralization. Instead of bitcoin becoming similar to the traditional market, it is this domain that is making steps towards cryptocurrencies.

Institutional Money Flow

An additional reason why so many are calling the current rally very healthy is the fact that for the first time ever, institutional money is flowing into the cryptocurrency. Facilitating this are mainstream payment companies like PayPal and Square. Also, cryptocurrency-focused businesses like Coinbase, which have a long track record, are helping institutional entities to procure bitcoin and also to keep it safe and secure. That process comes with a range of rewards. For example, in Q3 Square showed that its CashApp mobile wallet attained a record revenue of 1 billion USD.

This came mainly thanks to the reveal that PayPal is going to start providing crypto trading and holding services, even though in a very reduced capacity. Regardless of that, the general public took this as a cue that the value of these cryptocurrencies will grow on the account of the PayPal entrance. Presently, with the record-breaking process being underway, there is no way to deny that logic sequence. That is why, even though it is problematic to call any cryptocurrency rally a stable process, the present unfolding of the rise in price does seem like something more expected in the current financial climate.

Altcoin Weakness and Attention

The narrative of a strong and fundamentally solid rally has one major flaw: altcoins. Since the start of the rally and the price rebound in April, every cryptocurrency has been trailing behind BTC. For example, the ethereum token is 58 percent away from its previous record. Litecoin is down some 77 percent and XRP is 82 percent from that figure. Also, there is a strange absence of public chatter on the topic of the ongoing rally. In 2017, the number of tweets on the huge social network was a lot higher than it is today. On one hand, the novelty factor has gone down but there are plenty of other indicators that point that this chatter should be here. But, other indicators of public engagement are mirroring this – google search trends are some 20 percent of those from 2017.

It seems that ordinary citizens across the world are not that interested in the phenomenon of bitcoin. Yet, it appears that more people than ever are using digital currency wallets. The potential explanation for the lack of interest is the otherwise insanely interesting year – here, things like the COVID-19 coronavirus pandemic and the one-of-a-kind US Presidential elections are just some of the headlines that bitcoin has as its competition. However, despite all of this, no one can argue against the fact that bitcoin managed to break its own record. This comes after so many negative opinions about it, especially in the wake of the March crash. Now, while there is no telling if the rally will break or continue, a new chapter in the history of cryptocurrency has been written.

Source: CoinDesk