Bitcoin is going crazy again! Breaking through $19,000 is just one step away from a new high

China Fund News reporter Jin Youzhi

Bitcoin is one step closer to its all-time high. Last night, Bitcoin once again hit a three-year high, breaking through $19,000 and rising to $19,469, just "one step away" from its all-time high of $19,891.

Since November, Bitcoin has been on a "rapid march" and has risen by more than 38%. Last week alone, Bitcoin rose by 15%.

Naeem Aslam of Avatrade believes that the fear of missing out on Bitcoin’s rally is pushing Bitcoin to its highest level in three years. “Traders know that crypto assets are not regular investments but hype and when it returns, it must be examined. An important factor we need to keep in mind is that the bull run has not started yet. So far, it is just a recovery. The real bull run will only start when the price breaks through the $20,000 level.”

Cryptocurrencies are rising collectively

Ripple rose more than 46% in 24 hours

Driven by the surge in Bitcoin, cryptocurrencies also collectively surged. According to Coin data, as of 6:30 a.m. Beijing time on the 25th, Ripple (XRP) has risen by more than 46% in the past 24 hours, and XLM, SKY, PIVX, and QSP have risen by more than 30%.

Bitcoin Funds Rise More Than 45% in November

Funds focusing on Bitcoin investment also rose sharply. Last night, the GBTC fund rose by more than 8% at one point.

Although the gains slowed down near the end of trading, the fund's gains since November are still as high as 45%.

Public information shows that the GBTC fund (Grayscale Bitcoin Trust) was launched by Grayscale Assets in April 2018 and is known as "the first publicly listed security that invests solely in Bitcoin and derives value from the price of Bitcoin." Grayscale Assets is the world's largest crypto asset management company. On November 6, the total size of Grayscale's asset management had reached US$9.1 billion, a record high.

Will the entry of payment giants lead to a shortage of Bitcoin?

The trading volume of exchanges partnered with Paypal has tripled. Since Paypal announced that it would provide Bitcoin trading services, Bitcoin has been rising rapidly. Many voices in the market believe that the entry of payment giants has caused a situation of "supply exceeding demand" for Bitcoin, thus driving the rise of Bitcoin. Paypal cooperates with Paxos, a provider of cryptocurrency infrastructure, for custody and trading.

The latest data from CoinGecko shows that the trading volume of Paxos exchange itBit has remained in the same range since September last year, but after PayPal recently launched its Bitcoin service, the exchange's trading volume has more than tripled.

Bitcoin hedge fund giant Pantera Capital estimates that in just three weeks, PayPal customers have bought about 70% of the new supply of Bitcoin. Dan Morehead, founder and chief investment officer of Pantera Capital, commented that customers of PayPal and Square have bought all the new supply of Bitcoin in the market, and this supply and demand situation has driven the price of the currency up.

Brian Kelly, founder and CEO of hedge fund BKCM, said the bigger fintech effect is about new demand — Square and PayPal are making it easier for first-time (bitcoin) traders to buy through mainstream apps.

Chris Weston, an analyst at brokerage firm Pepperstone, believes that the story of Bitcoin being accepted and used is real, and that supply is not enough to keep up with demand. PayPal announced on October 21 that it will allow US customers to buy and sell Bitcoin, Bitcoin Cash, Ethereum and Litecoin from their accounts. This is a gradual rollout plan, but given PayPal's huge global distribution, the market sees this as a big step forward.

Jacob Skaaning, fund manager of digital currency hedge fund ARK36, said that the recent surge in Bitcoin was mainly due to the lack of supply liquidity. Due to excessive demand, the Bitcoin trading volume on the trading platform has actually fallen.

Analyst: Investors need currency depreciation hedging tools

Chris Weston of brokerage firm Pepperstone said that as G7 central bank balance sheets rise, investors are looking for the best hedge against currency depreciation and global money supply appears to be encouraging stock and cryptocurrency investors.

The analyst also mentioned that although this is a long-term factor, Bitcoin's infrastructure is set up for appreciation - every 210,000 blocks mined, miners' rewards are reduced by 50%. This is a form of quantitative tightening. In theory, unless something changes, the last Bitcoin will be produced in 2140.

*Fidelity Investments launched a Bitcoin fund with a minimum investment of $100,000, fully demonstrating the participation of passive funds. The Greyscale Bitcoin Trust, which now has total assets approaching $10 billion, also provides more sophisticated investors with access to Bitcoin. In fact, the longer-term reason lies in the change in regulatory levels, which means that institutional funds can invest in cryptocurrencies. The rise in institutional participation seems to be the main difference between the current momentum and the 2017 rally.

Some are not so optimistic

Peter Boockvar, chief investment officer at Bleakley Consulting, believes the idea that cryptocurrencies are replacing one of the world’s oldest safe-haven assets is “complete nonsense.”

“An asset class that’s 10+ years old is not going to replace a class that’s 5,000 years old,” Boockvar said in a note to clients Monday. “The former can certainly complement the latter, but it cannot replace it.”

Dalio, founder of Bridgewater Fund, also believes that Bitcoin is not a good medium of exchange. Bitcoin fluctuates too much, making it difficult to use it to buy most goods. Moreover, Bitcoin is not a good wealth storage tool because Bitcoin fluctuates too much and has little correlation with the price of the things we need to buy, so owning Bitcoin does not protect purchasing power.

Bank of England Governor Bailey has also said that it is difficult to see that Bitcoin has intrinsic value and is concerned about its use as a means of payment. There may be good reasons to hold Bitcoin, but investors must understand that price fluctuations are very large.