After the Christmas rally, followed by the post-Christmas rally, it now seems that the New Years’ rally for Bitcoin is coming. After reaching a new all-time high of around $28,000 on December 27, the price rose significantly again today and peaked at a $29,090 mark. Bitcoin has now risen over 700% since the collapse in March of this year.
The growing interest among retail investors is also quite obvious if we take a look at Google’s search trends. After institutional investors were previously the main price drivers, ordinary consumers now also seem to be interested in Bitcoin, which in theory could lead to a further price increase.
From a psychological perspective, altcoins are interesting for many investors because they appear cheap. Compared to the bitcoin price of $29,090, Ethereum for $700, or other lower-priced coins, seems like a good deal. They are interesting for existing Bitcoin traders as they are able to get more Bitcoin by trading altcoins.
Institutional Investors: What Will Happen in 2021?
They’ve waited a long time for institutional investors to enter the Bitcoin stage, but this year the time has finally come. After several investors had made positive comments about Bitcoin in the past, some of them followed suit in 2020. MicroStrategy invested more than $1.3 billion in Bitcoin, and GrayScale investors also made strong gains. In addition to these two well-known crypto players, there were a few billionaires who also confirmed a crypto investment.
Just like all other fiat currencies, the US dollar is becoming increasingly vulnerable to higher inflation due to current monetary policy. In order to stimulate the economy during the Coronavirus crisis, the central banks are using their last resort — a consistent increase in the money supply. This is in itself quite suboptimal, but now it’s historically the first time that a central bank is directly active on the stock markets.
Conclusion: Bitcoin Bulls Have Reason to Be Happy
Bitcoin can easily prove its real strength with the new all-time high. Day traders should be careful and not get carried away by euphoria. A correction seems to take place sooner rather than later at this point. In any case, we can look forward to the year 2021 — most likely it will be an eventful one. Wish you a Happy New Year guys!