26 December 2020
Christmas has finally arrived early for Bitcoin investors and crypto enthusiasts. In a massive market rally, Bitcoin (BTC) has surged 6.6% smashing past its key resistance of $20,000 and hitting its new all-time high of $20,820 levels.
At press time, Bitcoin (BTC) is trading at for $20,617 with a market cap of $383 billion. The massive institutional money rain has helped Bitcoin break all barriers and attain new highs. The massive BTC price rally extends the crypto’s year-to-date gains to above 180%. Moreover, Bitcoin (BTC) price has also multiplied 5x since its lows in March 2020.
With the latest move above $20,000 Bitcoin enters the unchartered territories also called the ‘Bitcoin price discovery’ range. Meaning, Bitcoin has entered those regions where there is no historical data to predict further price movements and the highs can be endless. Many analysts have given six-figure predictions I.e. $100K and above for the Bitcoin (BTC) price by the end of 2021.
However, charting out the recent price movement in Bitcoin since October 2020, Arba Global CEO Bill Barhydt notes that if the recent Bitcoin trend continues, it can hit $24K in the second-half of December 2020, and $35K by Q1 2021.
As Bitcoin moved past $20,000 levels, trading orders soared across numerous exchanges – including Binance and Coinbase who both reported downtime. In fact, Binance’s CEO noted that the exchange faced some scaling issues due to rising Bitcoin transactions
In contrast, Kraken has made an interesting announcement stating that it plans to add support for Bitcoin Lightning in early 2021. The official announcement from Kraken notes:
“In 2021, we are committed to hiring a team to focus specifically on the Lightning Network, as part of our continuing effort to deliver the best possible experience for traders and investors. We expect to allow clients to withdraw and deposit Bitcoin on Lightning in the first half of 2021, which will allow clients to move their Bitcoin instantly and with the lowest fees.”
COVID-19 Pandemic Brings Institutions Closer to Bitcoin (BTC)
The unprecedented monetary-policy measures initiated by central banks across the globe on the outbreak of the COVID-19 pandemic have pushed institutions closer to Bitcoin.
Apart from Gold, institutions now see Bitcoin as a potential hedge against the currency debasement and inflation predictions. Over the last few months, institutions have poured thousands-of-million-dollars in Bitcoin (BTC). While the list is getting bigger with each passing day let’s take a look at the three of the most recent institutional Bitcoin bets, and probably the biggest ones so far.
- British fund manager Ruffer Investment Management recently reported its $745 million investment in Bitcoin during the month of November 2020. This investment by Ruffer is 2.7% of its total assets under management of $2.7 billion.In an email to Reuters, the Ruffer spokesperson said that this investment “acts as a hedge to some of the risks that we see in a fragile monetary system and distorted financial markets. We see this as a small but potent insurance policy against the continuing devaluation of the world’s major currencies.”
- Canada’s biggest mutual fund manager CI Financial announced the completion of its $72 million Bitcoin fund IPO in partnership with Mike Novogratz’s Galaxy Digital. The shares of the CI Galaxy Bitcoin Fund will be available on the Toronto Stock Exchange against USD and CAD.CI Financial will manage this fund wherein Galaxy Digital will be the sub-adviser. Besides, Galaxy Digital will also execute Bitcoin trading on behalf of the fund.
Speaking to Bloomberg, CI Financial Chief Executive Officer Kurt MacAlpine said: “Having a product that can be bought directly — it can be bought through their financial adviser on behalf of them — it just makes their life a lot simpler than having to address their desire for Bitcoin via different structures and wallets.”
Similarly, Connecticut-based One River Asset Management shared that it purchased ~$600 million worth of BTC in November 2020 when the price was under $16,000. Eric Peters, CEO of One River Asset Management said: “Covid-19 provided the ultimate catalyst for that transition. This is the most interesting macro trade I’ve seen in my career.”
Cryptocurrency Market Cap Grows By $40 Billion In A Single Day, Altcoins Rally 8-10%
With the latest market rally, the overall cryptocurrency market cap has surged by an additional $40 billion and is currently at $600 billion. All of the top-five altcoins are up by 8-10%.
With the recent rally, Ether (ETH) price has moved past its $600 barrier and is currently trading at $622 with a market cap of $70.8 billion. Apart from Bitcoin, Ethereum (ETH) remains one of the top bets for institutional investors.
In a big development, the world’s leading derivatives marketplace Chicago Mercantile Exchange (CME) announced the launch of its Ether Futures contracts on February 8, 2021. The CME Group is currently waiting for regulatory approval of its ETH Futures contracts.
CME chief of Equity Index, Tim McCourt said: “Based on increasing client demand and robust growth in our Bitcoin futures and options markets, we believe the addition of Ether futures will provide our clients with a valuable tool to trade and hedge this growing cryptocurrency.”
Similar to Bitcoin Futures, the CME Ether Futures Contracts will also be cash-settled. On the other has the Grayscale Ethereum Trust (ETHE) has been growing massively and now holds over $1.7 billion worth of assets under management. Shares of ETHE (OTCMKTS: ETHE) have surged over 274% in Q4 2020.
As of writing this article, Ripple’s XRP has surged above 6% and is trading back above $0.50. Similarly, Litecoin (LTC) has surged 8.8% and trading at $88.64.