Bitcoin has been on a tear recently. It reached a high of $13,250 during today’s Asian session, and Bitcoin enthusiasts have already talked about a move to $100,000 in 2021.
To be fair, Bitcoin did experience some unusual bullish behavior lately. After it reached $12,000 in August, it fell back to $10,000 in line with what the stock market in the United States did and what the USD did too.
However, from the $10,000 onward, the positive correlation with risk-on/risk-off broke. Bitcoin held its levels on any risk-off move and advanced dramatically on a risk-on. As such, it put a new 2020 high, surging over 30% in the last month or so.
PayPal Accepting Crypto Payments
The news responsible for the sharp rise in Bitcoin came from PayPal. The giant online payment processor announced that it will accept crypto payments. The news triggered sites like Kraken, a crypto exchange platform, to have operational problems, as retail investors hurried to buy Bitcoin and other cryptocurrencies.
However, there is a catch in the PayPal announcement – crypto used in PayPal transactions cannot be transferred to other accounts on or off PayPal. In other words, these are just entries in a PayPal database, not something that has to do with Bitcoin in general. Nevertheless, the attention and awareness of cryptocurrencies will rise, and, as a result of an increase in popularity, the price might rise too.
Earlier in the article, a reference was made about a possible $100,000 value for Bitcoin in less than a year. One of the most popular models that track Bitcoin’s evolution since inception, S2F, predicts that such a move is in the cards. If that is correct or not, we will find out soon enough.
Bitcoin’s jump from $10,000 also comes in the context of increased adoption from large public companies. One of them, MicroStrategy, announced a couple of months ago that it invested over $150 million in Bitcoin. Yesterday’s Bitcoin sharp rise to 2020 highs triggered a jump in MicroStrategy’s share price of over 6% too.
The 30% appreciation in less than a month for the price of Bitcoin is exactly what retail investors are here for. But it also fuels regulatory concerns of quick get-rich schemes, unstable prices due to increased volatility, and delays implementation of regulatory frameworks.
Is Bitcoin decoupling from the USD main trend for real? That is the question investors should find an answer to.