After the cryptocurrency market rallied in November, after a period of cowhide market conditions, Bitcoin suddenly broke upward last night, surpassing the $20,000 mark. Today, it hit a record high of 23586.91 US dollars, which is nearly 3 years away from the last historical high at the end of 2017. Some market analysts believe that this bull market is different from three years ago. The rapid increase in demand from institutional investors and the loose monetary policy of hedging will benefit the cryptocurrency market.
According to the cryptocurrency trading data platform CoinMarketCap, Bitcoin continued its upward trend last night during the Asian trading hours today, and then set a new high, which was 17.4% higher than the high of $20,809 at the end of 2017. As of 8:30 p.m., Bitcoin rose 15.3% to $22,697.28, while the turnover in the past 24 hours was $68.53 billion. As for other cryptocurrencies, they are also sought after by funds. Among the top 20 cryptocurrencies with market capitalization, except for the two stablecoins, TEDA and USD Coin, all went up. Ether and Ripple rose 11% and 25% respectively.
The uptrend of the cryptocurrency market this time has mainly benefited many institutional investors, who have successively increased the proportion of investment in bitcoin and other assets in their asset portfolios. The launch of cryptocurrency trading by PayPal has also become a new driving force to push the market higher. At the same time, many investors believe that this bull market, which includes an ICO (Initial Coin Offering) frenzy, has a more solid foundation than it was in 2017.
Under the influence of the new crown pneumonia (COVID-19) epidemic around the world, many central banks hope to save the weak economy by relaxing monetary policy and “printing silver paper”. However, the currency devaluation worries investors. In addition to using gold as a safe haven, Bitcoin is also another investment option. Ricardo B. Salinas, the founder of the Salinas Group, Mexico’s second richest man, announced in November that 10% of his current assets were Bitcoin, believing that he could protect his property. Other institutional investors also want to use cryptocurrency as a hedge.
At the same time, the production capacity of Bitcoin was halved in May of this year, and the increase in demand from institutional investors naturally stimulated its price to rise. In recent months, many well-known institutional investors, including MassMutual Life Insurance, Guggenheim Partners, SkyBridge Capital, and Citigroup, have indicated that investing in Bitcoin is different from the past bull market driven by retail investors.
Furthermore, after many central banks have revealed their plans to develop central bank digital currencies (CBDC), more people have begun to pay attention to the development of cryptocurrencies and digital currencies. In addition to investment, people also look forward to spending in these currencies in the future, and PayPal intends to allow 28 million merchants around the world to accept payments in cryptocurrency next year, further promoting application scenarios in daily life.