Bitcoin has set another record on Wednesday in the early Asian trading hours as the digital currency continued its bull run to go beyond the key $35,000.
This solid upward rally is significant as the prices soared from the $30,000 level to the new high in merely 24 hours, which is a daily gain of more than 16.6 percent. The digital currency is now testing this key level with strong signs of a bull run.
Bitcoin is having a wild upward run lately. Since the digital currency smashed the key $20,000 level last month, the prices soared at a tremendous rate: from that level to the fresh highs in around 20 days. For a contest, that is a gain of 75 percent in value.
#Bitcoin has closed the past 5 days above 30K, a truly remarkable record.
— Cameron Winklevoss (@cameron) January 5, 2021
Institutions Are All In
Both retail and institutional demand for the digital currency spiked and the exchanges are also setting records in volume.
Though there are many reasons behind this rally, one of the key reasons is the increasing institutional investment in the cryptocurrency. Nasdaq-listed MicroStrategy was among the first to set the trend with its $250 million investment and later increasing it to over a billion dollars. Other companies, including American mutual fund leader, MassMutual follow suit and bought $100 million worth of Bitcoin.
Additionally, Hedge funds weighed in, and Anthony Scaramucci’s SkyBridge Capital launched a new Bitcoin fund.
Moreover, the crypto market sentiment strengthened as JP Morgan Chase, the largest Wall Street bank and a previous Bitcoin critic, recently predicted a long-term Bitcoin price of $146,000.
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Institutions called 2017 #Bitcoin bull run a FOMO, but they are into this FOMO in 2021.
FYI: #BTC breached $35k
— botsatoshi_ (@botsatoshi_) January 6, 2021
Fear Is Growing
Despite the positive sentiment, many are also getting skeptical with the extreme bull run. Crypto derivatives traders are cutting leverage positions and as CryptoQuant CEO, Ki-Young Ju articulated it: “$BTC derivative traders are uncertain about the next move, and scared.”
This indicator is better than the Fear & Greed index.$BTC derivative traders are uncertain about the next move, and scared. https://t.co/6MdzR5jjBc
— Ki Young Ju 주기영 (@ki_young_ju) January 5, 2021
Furthermore, SkyBridge’s Scaramucci warned about a possible Bitcoin bubble as the rising prices are creating a FOMO sentiment in the markets, which might lead to extreme profit booking.
“This could be a blow-up top bubble. We expect the fund to be volatile and it could lose money,” Scaramucci recently told CNBC. Interestingly, SkyBridge’s pitch to its Bitcoin fund investors called the original crypto “better at being gold than gold.”