Bitcoin has hit new all-time highs in time for Christmas as a formative year for the largest cryptocurrency sees it deliver 580% gains.
As the bull run appears far from over for BTC hodlers, Modern Consensus takes a look back at recent events. We also publish a markets outlook every Monday, the latest edition of which can be found here.
Bitcoin dines on “Christmas bear with all the trimmings”
This week has been marked by a struggle for $23,000 for Bitcoin after it began with previous all-time highs of $24,217.
With monthly performance knocking on 30%, some were concerned that new highs were coming too fast and that a correction should see markets investigate levels as low as $18,500.
Data from exchange orderbooks appeared to confirm that possibility, with little buyer support in place other than that at $20,000. By contrast, plenty of sell walls were gathering north of $24,000, making it notionally unlikely that Bitcoin would be able to overcome them unless major investment suddenly took hold.
In the event, that is exactly what happened—on Christmas Day, those sell walls suddenly melted away, with Bitcoin leaving intact only the last at $25,000. Beyond that, unexplored territory returns with no sellers in wait at all.
“Bitcoin all-time high. Merry Christmas,” Peter McCormack, host of the What Bitcoin Did podcast, summarized to Twitter followers.
“It’s roast bear for Christmas dinner with all the trimmings.”
As of press time on Friday, Bitcoin is circling $24,500 retaining its new levels. These are decidedly unexpected—holidays are not known for major buy-ins, particularly as the institutional clients responsible for recent gains are unlikely to be participating on Christmas Day.
Interest has nonetheless persisted this week, with MicroStrategy revealing that it had spent days on end accumulating Bitcoin in high-frequency trading.
Bulls also seem to care little about external factors triggering sudden losses on Wednesday and Thursday, these coming in the form of US regulatory retaliation against blockchain payment network Ripple and its associated token, XRP.
After a suffering 63% dive in 24 hours, XRP/USD rebounded to $0.35 as Bitcoin once again found strength and beat out previous resistance.
Bulls and bears clash but Bitcoin endures
The move came as Jay Clayton, the outgoing chairman of the Securities and Exchange Commission which instigated the Ripple lawsuit, was set to be replaced by Elad Roisman, a figure known to be supportive of progressive cryptocurrency regulation.
“…The SEC must examine and re-examine its rules, regulations and guidelines to ensure that they are still working as intended to accomplish the SEC’s mission. This is most recently manifested in areas such as data protection and cybersecurity, as well as the emergence of new investments and technologies such as initial coin offerings and blockchain,” he told the Senate Banking Committee as early as 2018.
“It is essential that the SEC approach these new challenges in a fair and transparent manner, provide clarity and certainty to the markets and investors, and enforce the laws and regulations that hold market participants accountable.”
His words would seem to contrast with the ongoing bearish prognoses from Bitcoin’s best-known naysayers. Among them, economist Nouriel Roubini predicted that the incoming Biden administration would “crack down” on the entire cryptocurrency sector.
“Biden’s team, starting with Yellen who was my boss at CEA, will crack down on this criminal tax evading & AML-KYC-TFC-evading crypto/shitcoins cesspool much more than Mnuchin,” he claimed on Christmas Eve.
Regardless of how Biden’s White House treats crypto, however, the commitments from big money provide a solid statement for belief that its investment prowess is set to endure.
In timely comments, MicroStrategy CEO Michael Saylor provided a stark comparison between holding Bitcoin and fiat currency.
“Whenever someone questions our #Bitcoin Strategy, I always wonder what advice the critic would give to the 44 million people in Argentina,” he tweeted on Christmas Eve.
Even before Friday’s gains, the Argentinian peso was down 60% in three months against Bitcoin, while over the past five years, its value has disintegrated by practically 100%.
In a Christmas interview with CNBC, meanwhile, Morgan Creek Digital co-founder Anthony Pompliano explained that even in a crisis, Bitcoin could do “hugely beneficial things” for an investment portfolio.
“The market has rendered a decisive victory for Bitcoiners,” he added.
“When investors needed a safe haven asset, they ran to the hardest money that’s ever been created.”