Bitcoin rallied today, climbing above $ 20,000 for the first time in history and hitting a new all-time high.
The world’s largest digital currency broke through the $ 20,000 level around 8:30 a.m. EST, according to figures from CoinDesk.
The cryptocurrency reached $ 20,817.80 around 9:15 a.m., additional data on CoinDesk reveals.
By rallying to this price point, bitcoin has risen by around 190% year-to-date and nearly 440% from its 2020 low of below $ 3,900 reached in March.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
How this bull market is different
The current bull run is very different from the rally that pushed bitcoin prices to an all-time high at the end of 2017.
While the previous surge was driven by factors such as strong retailer interest and widespread media coverage, this latest rally took place amid a global pandemic and growing institutional adoption.
As the coronavirus pandemic has virtually crippled industries around the world, leading to business closings and job losses, many governments have responded with monetary stimulus, forcing them to print billions of dollars.
While these measures may have been helpful in the short term, they have raised concerns that more traditional fiat currencies like the US dollar may lose their purchasing power.
Some have interpreted this development as the latest signal that digital currencies are the future.
In addition, some institutions have made highly visible bitcoin purchases, a prime example being the recent decision by MassMutual to invest $ 100 million in digital currency.
Another good example is the recent decision by software company MicroStrategy to purchase over 40,000 units of bitcoin this year, spending $ 475 million between three separate transactions and thus generating headlines.
In addition to these moves, MicroStrategy recently sold more than $ 600 million in banknotes, with the intention of using the proceeds to buy bitcoin.
Now that bitcoin has hit a new high, it will be interesting to see what price levels it hits in the future.
Denis Vinokourov, head of research for London-based digital asset firm Bequant, spoke of the situation, saying that:
“Now that Bitcoin has crossed $ 20,000, expect another wave of retail flow to materialize and push the main crypto asset up.”
“FOMO is now in overdrive because the people who missed the last race by almost $ 20,000 don’t want to sit on the sidelines anymore. ”
“Growing adoption by institutions will further support this rally and should easily help prices consolidate, paving the way for a run towards $ 25,000 as we move into the new year.”
Disclosure: I own bitcoin, bitcoin cash, litecoin, ether, and EOS.