Bitcoin sets record for longest time above $10,000

On September 28, Bitcoin price further consolidated its stay above $10,000 after closing at $10,721. At the time of writing, according to Coingecko data, Bitcoin price is $10,737.62, down 1.4% in the past 24 hours, which seems to indicate that this trend is still continuing.

The last time Bitcoin set a record for the duration of its price exceeding $10,000 was in 2017, when the record was set at 62 days. Two years later, in 2019, many people thought that the record would be broken, but the result was disappointing. Bitcoin's price of more than $10,000 lasted only 28 days before it "fell from the altar." But now, Bitcoin's price state of more than $10,000 has exceeded 63 days - according to Jason Deane, a Bitcoin analyst at Quantum Economics, this may be due to the "MicroStrategy effect," he explained:

"MicroStrategy CEO Michael Saylor publicly announced his purchase of Bitcoin on August 11, when the price of Bitcoin had just broken the $10,000 mark. This bold and groundbreaking move had a huge impact on the market and gave people great confidence and credibility in Bitcoin assets."

A new record was born!

The cryptocurrency has now opened and closed above $10,000 for 63 days, from July 28, 2020 to today, a new milestone. While Bitcoin briefly dipped below $10,000 during this time, it did not fall below $10,000 in a “one-day” range.

It is worth mentioning that during this period, the price of Bitcoin even briefly broke through the $12,000 mark. According to CoinMarketCap data, between July 28, 2020 and September 28, 2020, the highest price of Bitcoin was $12,359, which occurred on August 17, 2020. On that day, Dave Portnoy, founder of Barstool Sports, seemed to be promoting a pump-and-dump plan through low-market-cap altcoins. Portnoy posted many videos on Twitter, saying that he had found a new altcoin that he was very interested in, but he would not disclose which cryptocurrency it was. In response, he gave the reason that he did not want people to buy it first. After that, he tweeted that he had dispersed some of his cryptocurrency assets into the altcoin Orchid (OXT), adding that Orchid "will never die."

It is worth mentioning that Dave Portnoy revealed in an interview with Morgan Creek co-founder Anthony Pompliano that he bought $1.25 million worth of Bitcoin, even though he believed that Bitcoin was “just a big Ponzi scheme.” Dave Portnoy summed up his views on crypto trading:

“You’ve entered the school, but don’t be the one who takes the blame in the end.”

This time, Bitcoin price fluctuations also seem to be more stable. The last time Bitcoin was in the $10,000 range, its price volatility was high, with a volatility of 53%. This time, Bitcoin's volatility is only 20%, indicating that the recent period of price stability has been relatively stable.

The previous run lasted 62 days, two years ago, from December 1, 2017 to January 31, 2018. During this period, Bitcoin actually soared to its highest price ever, reaching $20,089 according to CoinMarketCap data at the time.

The Microstrategy Effect

Although the current price of Bitcoin is still below the $20,000 milestone reached at the peak of the bull market in 2017, at least the market has recognized Bitcoin as a stable asset with investment appeal.

One of the reasons for the change in market attitude is that cryptocurrencies have the ability to attract institutional investors. For example, MicroStrategy CEO Michael Saylor described Bitcoin as "digital gold" and even called the asset "a reliable store of value and an attractive investment asset with greater long-term appreciation potential than holding cash."

Additionally, Bitcoin could be a beneficiary of the broader mainstreaming of the cryptocurrency industry.

Regulatory policies improving?

According to new guidance issued by the Office of the Comptroller of the Currency (OCC), U.S. national banks and federal savings associations are now allowed to hold reserves for stablecoin issuers, that is, stablecoin issuers can place assets in reserve accounts of U.S. national banks to ensure that the issuer has sufficient assets to support stablecoins in the presence of custodial wallets. For the above reasons, the U.S. Office of the Comptroller of the Currency concluded that a national bank may hold such stablecoin "reserves" as a service to bank customers.

In addition, in July this year, the Office of the Comptroller of the Currency of the United States also opened the door to federal savings associations and national savings banks that wish to hold cryptocurrencies on behalf of their customers. According to an announcement issued by the regulator on July 22, the Office of the Comptroller of the Currency of the United States allows national banks and federal savings associations of all sizes to custody cryptocurrencies, and states that such custody services are a modern form of traditional banking activities related to custody services. About a month ago, the Office of the Comptroller of the Currency of the United States sought public opinions on the digital activities of such institutions (including digital assets and blockchain fields). This resolution marks a major change in the relationship between the US banking industry and the emerging cryptocurrency ecosystem.

In addition to the announcement, the Office of the Comptroller of the Currency recently issued an interpretive letter outlining the policy shift. Although the letter is unnamed, some of the regulatory requirements are very noteworthy, especially those related to the power of national banks to provide cryptocurrency custody services to customers. The Office of the Comptroller of the Currency stated:

Since the digital currencies exist only on the blockchain or distributed ledger where they are stored, the facility does not actually own the digital currencies. Instead, through the use of unique cryptographic technology, the right to transfer a specific unit of digital currency between parties means that a bank that 'holds' digital currency on behalf of a client actually possesses the cryptographic access keys to that unit of cryptocurrency.

In addition, the explanatory letter also cited the relevant explanation in the existing regulatory guidelines of the U.S. Office of the Comptroller of the Currency, saying that banks may hold a variety of assets as custodians, including some unique and difficult-to-value assets, and bank custody activities include assets transferred electronically. The U.S. Office of the Comptroller of the Currency added:

Institutions that have long been engaged in safe deposit and custody activities can provide cryptocurrency custody services, which is a form of authorization that allows national banks to perform traditional banking operations electronically, including in a trusted and untrusted capacity. Banks that provide cryptocurrency custody in an untrusted capacity are essentially providing custody for the cryptographic keys to control and transfer customer cryptocurrencies.

It is worth mentioning that at the time of writing this article, the total size of Grayscale Asset Management has rebounded to US$6 billion. The world's largest cryptocurrency investment fund released a new analysis report in early September, which showed that the market value of Bitcoin should be much higher than it is now, because the inflation of traditional legal currencies has prompted investors to start looking for new ways to protect their funds, because Bitcoin's verifiable scarcity and supply cannot be controlled by central institutions, which makes it an important means of storing value. (Golden Finance)