Bitcoin reaches an all-time high in three years in a 167% year-to-date increase that has been attributed to illiquid BTC and proposed regulatory changes among others. All this happened despite low publicity.
Bitcoin has reached a new all-time high three years after December 2017’s $19,783 peak. According to Coindesk’s Bitcoin Price Index – BPI – as of 30 November 2020, Bitcoin traded above $19,900. This represents a 167% year to date increase. The cryptocurrency has seen a steady rise in value since March’s dip to less than $4000. The ATH differs with each exchange. On Coinbase for example, ATH was $19,892, with Gemini and Binance at $19,999 and $19,799 respectively.
Illiquid BTC, Proposed Regulations to Result in Bitcoin New All-time High
While 2017’s ATH was due to investors on the Asian market’s sudden interest in cryptocurrencies, this one can be attributed to the increase in investor-held BTC. Three years ago, the crypto-giant was under public scrutiny, with some wondering if it had any use beyond darkweb transactions.
Today, however, this peak is a consequence of spending by central banks in an effort to cushion the economic blow of the coronavirus pandemic.
It is also a result of the increase in investor-held BTC. Some investors now view Bitcoin as an alternative asset, with some including it in their investment portfolio. Philip Gradwell of Chainalysis notes that this new set of investors are buying in ‘steady amounts…and holding it as an investment’ as opposed to trading it.
The public’s change in perception is due to the potential of cryptocurrencies being made safer and more accessible by regulators. On 22 July, 2020, one such regulator, The Office of the Comptroller of Currency announced that that federal banks could hold cryptocurrencies for their clients. Payment companies Square and PayPal now also allow users to buy and hold select cryptocurrencies.
According to the New York Times, PayPal chief executive, Dan Schulman said in an interview said that the move was as a result of ‘conversations with government officials, and then seeing the dramatic shift into digital payments as a result of the pandemic.’
Here to Stay?
Interestingly, BTC peak comes at a time when publicity, social media mentions and search interest are all remarkably low.
Not all cryptocurrencies are enjoying the same level of growth, however. Rival Ether is showing a 58% drop from it’s late 2017 all-time high. Litecoin and XRP are down 77% and 82% from their respective highs.
It remains to be seen if BTC’s rally will continue.