Boom! Did you hear that?
That was the sound of Bitcoin (CRYPTO: BTC) breaking back above US$58,000 this morning.
According to data from CoinDesk, the world’s largest cryptocurrency by market cap hit US$58,150 (AU$74,550). In the past hour, it’s retraced some, back to US$57,830. Though by the time you read this it could be hundreds of dollars higher…or lower.
Such remains the volatile nature of these digital assets.
At its earlier price, Bitcoin was trading within a whisker of its all-time highs of US$58,330 set on 22 February this year.
What’s driving the record highs?
There’s no doubt that United States President Joe Biden’s US$1.9 trillion COVID recovery package has revived bullishness in the world’s share markets. And as we’ve witnessed in the past, when share markets roar, Bitcoin often charges higher.
According to Simon Peters, an analyst at multi-asset investment platform eToro (quoted by Bloomberg), “The announcement from the White House is very significant for risk assets in general, and crypto-assets specifically.”
Antoni Trenchev, managing partner and co-founder of crypto-lender Nexo adds, “Bitcoin’s resilience is proving to be the stuff of legend. Every correction is an opportunity to reset and restart the move upwards.”
While Bitcoin remains highly volatile and its future is hotly debated, the cryptocurrency has been buoyed by some high profile support of late.
Citi and Goldman Sachs analysts have given Bitcoin a positive nod, while Elon Musk’s Tesla Inc (NASDAQ: TSLA) bought US$1.5 billion worth of Bitcoin earlier this year. Blackrock, Morgan Stanley and Guggenheim have also come out in support of the digital asset.
According to Eleanor Creagh, Australian Market Strategist at Saxo Capital Markets, “In the long term, institutional and commercial support will further validate the cryptocurrency, increasing its popularity as a store of value and paving the path toward mass adoption.”
Bitcoin price snapshot
When you look at the recent Bitcoin price moves, you may be wishing for a time machine.
A mere two years ago, on 11 March 2019, Bitcoin was trading for US$3,900. One year ago it was worth US$5,700 and it wasn’t until the end of July 2020 that it broke through US$10,000.
In other words, a 1,390% price gain for Bitcoin over the past two years.