The price of the first cryptocurrency temporarily exceeded $40,000. This is a new all-time high demonstrated by bitcoin. Since March 2020, bitcoin rose in price by more than eightfold.
Bitcoin continues its strong bullish rally. For the first time in its history, the largest cryptocurrency by market capitalization rose in price to $40,000, adding more than 700% since the March collapse.
At its peak, on January 7, according to CoinMarkeCap, the weighted average bitcoin rate reached $40,402. Within 24 hours, the cryptocurrency added more than 6%. On January 2, bitcoin topped $30,000 for the first time, and on December 16, bitcoin surpassed the previous all-time high of $20,000 reached in December 2017.
Increased demand from institutional, corporate and retail investors boosted the current bitcoin rally. Market participants are attracted by the prospect of rapid growth in a world of ultra-low yields and negative interest rates. Bitcoin is seen as a defense against massive programmatic mitigations to combat the economic crisis caused by COVID-19.
“While further growth is inevitable, investors should not expect this to move in a straight line,” said Gavin Smith, chief executive officer of cryptocurrency consortium, Panxora Group. “The reality is that bitcoin is far from being a magic money tree, nor is it free from downward price swings. In fact, we can expect dips as sharp as 25% at times as investors periodically withdraw profits.”
The market capitalization of the whole cryptocurrency market exceeded $1 trillion. Other cryptocurrencies also found themselves in the green zone. Thus, Ethereum added 1.8% to $1231. Even the XRP token showed growth, although it had previously collapsed amid news of the lawsuit filed by the US Securities and Exchange Commission (SEC), which accuses Ripple of prolonged sale of unregistered securities in violation of US laws.
According to investor Bill Miller, bitcoin may replace cash in the future. He noted the advantages of bitcoin over gold and other traditional assets.
“Warren Buffett famously called bitcoin rat poison. He may well be right. Bitcoin could be rat poison, and the rat could be cash,” Miller noted in this Q4 market newsletter.