bitcoin

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bitcoin

Bitcoin Climbs to Record High - The New York Times

Posted: 30 Nov 2020 01:52 PM PST

Bitcoin is back. Again.

Nearly three years after it went on a hair-bending rise and hit a peak of $19,783, the price of a single Bitcoin rose above that for the first time on Monday, according to the data and news provider CoinDesk. The cryptocurrency has soared since March, after sinking below $4,000 at the outset of the coronavirus pandemic.

Bitcoin's latest climb is different from its last spike in 2017, which was driven largely by investors in Asia who had just learned about cryptocurrencies. Back then, the digital token soon lost momentum as people questioned what it could do other than allow for easy online speculating and drug and ransom payments.

While those questions remain, Bitcoin is now being fueled by a less speculative fever. Buyers — led by American investors, including companies and other traditional investors — are treating Bitcoin as an alternative asset, somewhat like gold, according to an analysis from the data firm Chainalysis. Rather than quickly trading in and out of it, more investors are using Bitcoin as a place to park part of their investment portfolios outside the influence of governments and the traditional financial system, Chainalysis and other industry firms said.

"It's a very different set of people who are buying Bitcoin recently," said Philip Gradwell, the chief economist at Chainalysis, which analyzes the movement of cryptocurrencies. "They are doing it in steadier amounts over sustained periods of time, and they are taking it off exchanges and holding it as an investment."

The excitement has been underpinned by regulators and mainstream financial companies that are trying to make cryptocurrencies safer and more accessible. The Office of the Comptroller of the Currency, an American regulator, said this summer that banks would be allowed to hold cryptocurrencies for customers. And PayPal announced in October that it would follow its rival Square and allow people to buy and hold Bitcoin and a few other cryptocurrencies.

"Our move came as a result of conversations with government officials, and then seeing the dramatic shift into digital payments as a result of the pandemic," Dan Schulman, the chief executive of PayPal, said in an interview. More than a million people — three to four times what the company expected — joined a wait list to use cryptocurrencies before the feature was started, he said.

Bitcoin's rise is part of a broader exuberance in cryptocurrencies and stock markets, which are defying the gloom of a pandemic-induced recession. The Dow, S&P 500 and Nasdaq have hit record highs this past month, with Wall Street buoyed by the presidential election and the news of potential coronavirus vaccines.

Bitcoin is a digital currency with software and rules that were released in early 2009 by a shadowy creator with the pseudonym Satoshi Nakamoto. The computer code established that the total supply of Bitcoin would be limited. Only 21 million tokens will ever be created, distributed in small blocks each day — through a process known as mining — to some of the computers that maintain the currency's online infrastructure.

Like gold, Bitcoin can be created, moved and stored outside the purview of any government or financial institution. Bitcoins exist on a financial ledger, known as a blockchain, which is maintained and updated by a volunteer network of people running thousands of computers worldwide — a system meant to ensure that no one computer or institution can change the rules or control the network.

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Credit...Photo illustration by Francesco Carta/Getty Images

The open nature of the system — and the fact that anyone can join it and create a wallet without providing so much as a name or a phone number — has made it popular for those who want to circumvent the traditional financial system. They have included terrorists, drug dealers and countries, like North Korea, Venezuela and Iran, that want to evade American financial sanctions.

"This technology already plays a role in many of the most significant criminal and national security threats our nation faces," the Department of Justice said in a report in October. The report described how deeply Bitcoin had been woven into the infrastructure of the criminal world.

But Bitcoin's stateless nature has also won over investors interested in legitimate uses of the technology. Some have been motivated by a libertarian distrust of governments. Others who are less ideological have gravitated to Bitcoin as an alternative to the financial system.

Still, Bitcoin is not backed by anything other than its computer network and the faith of people who buy it and give it value on exchanges. Many of these people are betting that someone else will be willing to pay them more for their Bitcoin in the future.

That has made Bitcoin prices volatile. It fell to its most recent low in March when fear over the pandemic hit global markets. Soon after, though, investors began talking about Bitcoin as a beneficiary of the global downturn.

In May, Paul Tudor Jones, one of Wall Street's best-known hedge fund managers, said he had put almost 2 percent of his portfolio in Bitcoin. He said the cap on Bitcoin production made it an attractive alternative to the declining value of traditional currencies, which he thought was inevitable as central banks printed more money to encourage an economic recovery.

"Every day that goes by that Bitcoin survives, the trust in it will go up," Mr. Jones told CNBC at the time. He did not respond to a request for comment for this article.

Some public companies also dived into Bitcoin because of concerns about the value of the dollar. In August, MicroStrategy, a software company in Virginia, said it bought $250 million of Bitcoin to store some of the cash it had in the corporate treasury.

Michael Saylor, MicroStrategy's chief executive, said in an interview that after knowing almost nothing about Bitcoin at the beginning of this year, he had become a believer in how the hard-coded limit on the number of tokens would help it hold its value over time. He became so enthusiastic that he put $175 million of his own money into the currency. MicroStrategy later bought another $175 million of Bitcoin.

"For anything that anybody invested in as a store of value, it starts to look like it is better to move that into Bitcoin," Mr. Saylor said.

In October, Square said it was putting $50 million of its corporate cash into Bitcoin. In 2018, Square also began offering the digital currency on the Cash App, its phone app that people use to send money between friends and family. The company, which is led by Jack Dorsey, who is also chief executive of Twitter, said in early November that its customers held $1.8 billion of Bitcoin, up 180 percent from a year ago.

In October, analysts at JPMorgan Chase wrote a widely circulated note about how using Bitcoin as an alternative to gold — especially by younger investors — was creating a significant market for the tokens. Given that the total value of all outstanding Bitcoin, around $350 billion, was a small fraction of all the gold in the world, the analysts said they could see the value of Bitcoin going much higher.

Bitcoin's rally has been accompanied by a broader bull market in cryptocurrencies, just as in 2017. While much of the fervor three years ago centered on new coins from scammy so-called initial coin offerings, interest has shifted to coins trying to take part in what is known as decentralized finance, or DeFi. These systems, which remain buggy and unproven, aim to make it possible to take out loans and insurance or collect interest without involving any financial institutions.

Central banks from countries such as Singapore, Sweden and the Bahamas are also looking at creating national digital currencies, inspired partly by Bitcoin. The biggest project, from China's central bank, appears to be the furthest along.

The national coins, which would leave behind the volatility of Bitcoin, could make cryptocurrencies obsolete. But they could also make it easier to move in and out of digital currencies of all kinds.

Given the uncertainty around Bitcoin's value, any excitement is likely to be followed by a another contraction. But the number of crashes Bitcoin has survived is changing the conversation around the technology.

"Now it's LeBron James playing at age 21 and starting to dominate the court," Mr. Saylor said. "It's not LeBron James, age 13, throwing a temper tantrum. You've got a hardening and a maturing of the asset."

Bitcoin hits all-time high of $19,857, extends year-to-date return to 177% - Business Insider

Posted: 30 Nov 2020 01:55 PM PST

bitcoin

REUTERS/Jim Urquhart

  • Bitcoin hit a record high on Monday, surging above its peak reached in December 2017.
  • The world's most popular cryptocurrency climbed as much as 8.7%, to $19,857.03, bringing its year-to-date gain to 177%.
  • "The Bitcoin correction didn't last long, with the cryptocurrency having sights set on new highs once again," a senior market analyst at Oanda said.
  • Rising inflation and increasingly negative views of modern monetary policy are forcing investors to look for alternative ways to preserve the value of their capital, the cofounder of Chainlink said.
  • Visit Business Insider's homepage for more stories.

Bitcoin reached an all-time high on Monday, breaking its intraday record set in December 2017.

The world's most popular cryptocurrency surged as much as 8.7%, to $19,857.03, bringing its year-to-date gain to 177%. Last week the cryptocurrency crashed by $3,000 through Thanksgiving after large-volume profit-taking dragged on prices.

"The Bitcoin correction didn't last long, with the cryptocurrency having sights set on new highs once again, with $20,000 the ultimate goal in the short-term," said Craig Erlam, a senior market analyst at Oanda. "A move into uncharted territory and the psychological boost that would come with a move like this could propel Bitcoin aggressively higher."

Read more: Buy these 10 stocks set to soar and smash Wall Street's expectations in the recovery from COVID-19, RBC says

Cameron Winklevoss, a cofounder of the crypto exchange Gemini, said the token's potential to unseat gold as a store of value means its price could reach 25 times $19,000. "No other liquid asset in the universe can credibly offer this magnitude of asymmetric payoff in the next decade," he tweeted.

Sergey Nazarov, the cofounder of Chainlink, said he expected the price to eventually break $100,000 because the "digital gold" narrative seems to have normalized.

He said two factors would drive its price over $100,000.

For one, rising inflation and increasingly negative views of modern monetary policy are leading people and institutions to look for alternative ways to preserve the value of their capital, Nazarov said. And growing demand for yield and the rise of "decentralized finance," or "DeFi" - the fastest-growing sector in the blockchain industry - is accelerating its growth.

"Quite simply, the risk-reward equation is starting to flip from traditional financial assets being yield-bearing, less risky, and reliable stores of wealth resistant to inflation over to Bitcoin and various cryptoassets being the sources of yield, increasingly less risk, and a reliable store of wealth," he said.

Read more: GOLDMAN SACHS: Buy these 16 stocks that are underestimated for now, but should crush expectations in 2021-22 on the way to at least 20% upside

BTIG says cryptocurrency 'comes of age,' puts $50000 target on bitcoin for 2021 - CNBC

Posted: 30 Nov 2020 10:53 AM PST

A woman touches an ATM machine for digital currency Bitcoin in Hong Kong on December 18, 2017.

Anthony Wallace | AFP | Getty Images

BTIG strategists say cryptocurrency has come of age, and bitcoin should reach $50,000 by the end of 2021.

Bitcoin surged to a new record Monday, topping its 2017 high of $19,800, according to data from Coin Metrics. The volatile cryptocurrency crossed above $19,000 last week but fell back to about $17,000 at the end of the week, before bouncing back over the weekend.

The strategists initiated coverage of digital assets last week and said the market for digital currencies is very different than when frenzied trading led to a "blow-off" top in 2017. Since then, it has become accepted by major investors, corporations and governments, especially China. Bitcoin also has a finite supply of about 21 million.

Bitcoin price hits $19K as bulls show no fear of record futures gap - Cointelegraph

Posted: 30 Nov 2020 06:05 AM PST

Bitcoin (BTC) returned to $19,000 on Nov. 30 as a weekend surge continued to produce fresh gains for investors and hodlers.

BTC price up 18% against weekly lows

Data from Cointelegraph Markets and TradingView showed BTC/USD retaking another key psychological level during Monday trading.

The weekend had already produced major upside for the pair, which late last week dived to $16,300. By the start of Monday, $18,600 had appeared, with Bitcoin going on to deliver returns of at least 17% versus those lows.

As Cointelegraph reported, a giant $1,300 CME futures gap threatens to take the market lower, but buyers so far remain unfazed. At press time, highs above $19,200 were in progress with around half an hour to go before the start of trading on Wall Street.

BTC/USD 1-day hourly chart. Source: TradingView

"Leveling up. The crucial area around $17,800 held," Cointelegraph Markets analyst Michaël van de Poppe summarized just prior to the $19,000 move.

"Now the crucial area is $18,200 and the final breaker before ATH is the resistance around $18,600-18,900."