- Three-year high hit on Friday for Bitcoin as investor interest swells in cryptocurrency
- ‘Strong institutional interest and incoming retail flow’ boost Bitcoin price
- Bitcoin was the only cryptocurrency to gain investor interest in October on eToro
Bitcoin continued to notch up solid gains last week and burst through the $22,000 mark last seen in the market’s parabolic phase three years ago.
The premier cryptocurrency has gained a mammoth 51 per cent since October 1, rising from $14,837 to $22,500 on Friday, and up from its March low of $7,970, according to Independent Reserve.
Bitcoin is gathering demand from a range of investment sources ranging from retail investors, traders to institutions and hedge funds.
“Strong institutional interest – BTC futures open interest is at all-time highs – and incoming retail flow – Paypal opened up crypto buys to all US users – is providing continued fuel for this rally,” Jason Lau, chief operating officer at San Francisco cryptocurrency exchange OKCoin, told Coindesk.
Nicholas Pelecanos, head of trading at cryptocurrency exchange NED told CNBC the US election “helped push Bitcoin over the $US14,000 resistance, both sides want more stimulus which is positive for equities which Bitcoin has been correlating closely with throughout the year”.
Hedge fund legend Druckenmiller endorses Bitcoin
Bitcoin received an endorsement this week from US billionaire investor Stanley Druckenmiller, who said the digital asset was gaining investor attraction.
“Bitcoin could be an asset class that has a lot of attraction as a store of value to both Millennials and the new West Coast money, and as you know they have a lot of it,” he told Forbes.
The hedge fund investor said Bitcoin is gradually rising in status as an asset class.
“Frankly, if the gold bet works the Bitcoin bet will probably work better because it is thinner, more illiquid and has a lot more beta to it.”
Beta is a measure of risk or volatility in a financial instrument.
Bitcoin only major crypto to see higher interest in October: eToro
Bitcoin appears to be cementing its lead as the number one cryptocurrency, as other competitor digital currencies appear to be losing their sway.
Investor interest in BTC increased 16 per cent on-month in October, according to trading platform eToro.
Bitcoin was the only cryptocurrency out of 10 to experience positive investor flows in October, while nine others lost ground that month, said eToro.
Demand from eToro customers for Litecoin and Cardano both slipped 16 per cent in October, and investor interest in Ripple dropped 33 per cent.
Worse performing in terms of eToro customer demand last month were Ethereum, down 49 per cent on September; IOTA, down 53 per cent; and Tron, down 55 per cent on a monthly basis.
Tron’s 55 per cent dip in month-on-month trades came despite the initiation of bonus tokens for investors on eToro, through the launch of its staking service last month and a year-to-date return of 88 per cent, said eToro.
Staking refers to a process whereby an investor in cryptocurrency can gain rewards by participating in the validation of transactions on a blockchain, or by holding on to their cryptocurrency for certain periods of time.
Bitcoin is the top cryptocurrency traded by eToro customers
PayPal, economic stimulus and rising price boost Bitcoin
Bitcoin’s rising popularity on the eToro trading platform compared with other cryptocurrencies may be related to a range of factors.
These include US electronic payments platform PayPal’s decision to allow its customers to pay in Bitcoin, Bitcoin’s rising price, and the promise of more government spending to revive flagging economies.
US Federal Reserve chairman Jerome Powell reiterated the need for more stimulus spending for the US economy in a panel discussion with Bank of England governor, Andrew Bailey, and European Central Bank president, Christine Lagarde.
“Bitcoin was the focal point for investors last month, and for good reason,” said Simon Peters, eToro market analyst and crypto expert.
“With an astonishing rise from $US10,800 at the start of October to $US13,800 at the end, investors clearly bought Bitcoin in expectation of the next bull run,” he said.
“With fiscal stimulus continuing to be on the cards and snowballing interest from institutional investors, Bitcoin’s prospects look rosy for the coming months,” said Peters.