- Bitcoin on Wednesday shot past $20,000 for the first time.
- “Some of the biggest investors in the world have been singing Bitcoin’s praises in recent weeks,” an author of a bestselling book on cryptocurrencies said. “This suggests they already own Bitcoin and are hoping to encourage more people to buy and boost the price upwards.”
- Bitcoin surged more than 5% to trade at about $20,550 as of 9:30 a.m. ET, breaking a record of $19,857 set in late November.
- “We will be visiting the $20,000-$22,000 level at least half a dozen times before we break through to the $30,000 range later in 2021,” the CEO of a cryptocurrency firm said.
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The token jumped 5%, to about $20,550, as of 9:30 a.m. ET, bringing its year-to-date gain to 185%. Bitcoin has notched steady gains this year as more investors warm to its potential as an inflationary hedge.
But according to Glen Goodman, the author of the bestselling book “The Crypto Trader,” history has a warning for people buying bitcoin at its new all-time-high.
Some of the biggest bitcoin investors who have recently been singing its praises suggest they already own the token and are hoping to encourage more people to buy and boost its price, said the author, who is a contributing expert on cryptocurrency at the London School of Economics. It suggests Wall Street “whales” do this to sell their coins to smaller investors at higher prices.
“While I’m optimistic about the long-term prospects for Bitcoin, four years ago we had a very similar situation with bitcoin breaking new ground, but just two weeks later its price plummeted by more than a third,” he said. While noting that history doesn’t always repeat itself, he said that “the lesson is to be on your guard.”
Bitcoin breaking the $20,000 barrier proves three theories supporting its role as an alternative to existing money systems, according to Sergey Nazarov, a cofounder of Chainlink.
The first theory highlights the continued rise of inflation, which is why PayPal recently added bitcoin to its functionality. The second is the role of increased institutional adoption of crypto solutions. The third is that the ecosystem of decentralized finance provides greater security for financial products that an investor relies on to combat inflation, the crypto expert said.
Bitcoin’s record-setting run may have even further to go.
“We will be visiting the $20,000-$22,000 level at least half a dozen times before we break through to the $30,000 range later in 2021,” said Alex Mashinsky, the CEO of Celsius Network.
Mashinsky said bitcoin could also retest the $14,000-to-$16,000 levels in a period with low volume or with bad news. “That will probably be the last time most of us will have a chance to buy bitcoin below $20,000 levels ever again,” he said.
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