New all-time high: Bitcoin price shoots up to 19,799 US dollars
It is done! The Bitcoin exchange rate has managed to break its all-time high of US$ 19,665. This means that BTC has passed its high of 16 December 2017. What are the reasons for the Bitcoin price explosion?
After the strong consolidation of last week, only a few people expected that it could rise again so quickly. Thus, the Bitcoin exchange rate already approached 19,250 US dollars on November 25. But then followed the sharp correction to around $16,500 – profit-taking as is usual after a steep rise. Instead Immediate Edge of taking a break, however, the Bitcoin price was able to pick up strongly over the weekend – and set a new record high today, 30 November, at USD 19,799. The last all-time high for Bitcoin was 19,665 US dollars on 16 December 2017.
Bitcoin ChartThe Bitcoin price has reached a new all-time high.
The big players are entering Bitcoin
As we had already reported, more and more major investors are entering Bitcoin. So it is no longer just the small investors who are responsible for the rising Bitcoin price. In the perception of many investors, Bitcoin has developed from speculation to hedging. This new narrative is created by companies like Microstrategy or Square, which are publicly celebrated for exchanging a portion of their US dollar reserves for Bitcoin – less for speculation than for lack of confidence in the domestic fiat currency. This signal effect is in turn transmitted to all types of investors. From the small private investor to the world’s richest people and their asset managers who want to diversify their portfolio.
As recently as 30 November, for example, we reported on a major US hedge fund that wants to invest massively in BTC. The capital for this comes from Guggenheim’s Macro Opportunities Fund, a fund which, according to the website, „sets great macroeconomic ideas“. It is capitalised at five billion US dollars. According to the letter to the SEC, Guggenheim reserves the right to invest up to ten per cent, or $500 million, in Bitcoin. This would make it one of the largest investments in the crypto currency ever.
PayPal already caused bullish mood at BTC in October
The current Bitcoin rally has begun with PayPal’s announcement on October 21 that it will also offer Bitcoin transactions and the Bitcoin purchase. The fact that of the 346 million active PayPal users, most of whom live in the USA, the Bitcoin purchase is now just a click away can be seen as a clear positive for the Bitcoin course. PayPal makes it especially easy for people without crypto affinity to invest in crypto currencies.
The signal effect for the market should be no less than the fundamental demand generated by the PayPal service. It is therefore becoming increasingly difficult to see Bitcoin as an insignificant niche. At the same time, the pressure for financial companies to offer crypto services in the near future in order not to fall behind is increasing.
Bitcoin Halving is beginning to take hold
Furthermore, it should not be forgotten that the third Bitcoin Halving took place on 18 May this year. At this event the Block Reward was reduced from 12.5 BTC per block to 6.25 BTC. In the previous Bitcoin Halvings this led to an enormous rally a few months later. After all, if demand remains constant, the price has to rise when the supply decreases.
The most popular model to describe this effect is the stock-to-flow model. Looking at the current stock-to-flow chart, the Bitcoin price increases of the last few days are merely in line with the trend: