22:49 GMT18 June 2021
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    The world’s biggest cryptocurrency topped $9,000 in early trading Sunday and is expected to hit $10,000 within weeks – unless the bubble pops sooner.

    Kristian Rouz – Cryptocurrency traders say the recent rise in the value of Bitcoin is driven by increasing demand from investors who previously were skeptical of blockchain technology as a financial tool. Now, however, as volatility in global stocks remains rife despite the massive equity gains in the US, Bitcoin is gradually becoming a legitimate safe-haven asset – on par with gold and US Treasuries.

    In less than 24 hours, Bitcoin surged from $8,300 to $9,040 as of Sunday morning, with many traders eyeing a new psychological threshold of $10,000. Whether the most popular cryptocurrency will surpass this mark remains to be seen, but traders have observed a surge in demand for Bitcoin from stock, fixed-income and real estate investors.

    READ MORE: Skyrocketing to New Heights: Bitcoin Breaks Record of $ 9,000

    Bitcoin’s market cap has now exceeded $150 billion, making it more expensive than several prominent multinational corporations or even the annual budgets of some countries.

    The biggest Bitcoin exchange in the US, Coinbase, added about 100,000 new accounts during the Thanksgiving holiday, to a total of 13.1 million accounts as of Friday evening.

    "The move appears to be retail driven," Brian Kelly, CEO of BK Capital Management, said.

    Indeed, the massive increase in consumer spending in the e-commerce segment of US retail did not match the tepid sales in the brick-and-mortar segment, meaning some of the e-commerce transactions might have had a connection with Bitcoin or Bitcoin mining. This as Thanksgiving sales were dominated by the sale of electronics.

    According to data from CoinTelegraph, Coinbase now has more accounts than brokerage company Charles Schwab, reflecting the strengthening approval of the cryptocurrency amongst wider audiences of investors and traders.

    The surge in Bitcoin’s popularity also reflects the broad disenchantment among investors and the general public with governmental regulation, economic policies, fiscal enforcement and inept monetary policies.

    The increase in Bitcoin’s value also comes as the world’s largest exchange, the CME, is poised to open in the second week of December.
    This might suggest the world’s most popular cryptocurrency is in for a massive rally ahead of Christmas.

    "Anecdotally, everyone I have talked to in the cryptocurrency community has said that Thanksgiving table discussion was all about Bitcoin, and that inspired many family members to buy Bitcoin," Kelly said. "I suspect that pattern was repeated across tables everywhere."

    However, buying Bitcoin might not necessarily be the most prudent strategy, as further gains in the value of the cryptocurrency are questionable. Further Bitcoin moves are heavily dependent on regulation in mainland China, where, should the authorities opt to tighten their grip on Bitcoin, major bourses would not be able to operate.

    READ MORE: Bitcoin Could Be Temporary Bubble, But People Aren't Betting on That — Analyst

    This would most certainly impair the cryptocurrency’s value, and it’s reputation as being independent of governmental regulation and oversight.
    Besides, simple market factors could also contribute to Bitcoin’s demise.

    “Remember, bubbles happen around things that fundamentally change the way we live,” veteran investor Mike Novogratz, formerly of Fortress Investment Group, said. “The railroad bubble. Railroads really fundamentally changed the way we lived. The internet bubble changed the way we live. When I look forward five, 10 years, the possibilities really get your animal spirits going.”

    This means Bitcoin mining is still quite an appealing industry, despite its huge energy consumption. Yet bitcoin traders and investors should be cautious.

    Bitcoin is traded mostly in the Japanese yen, representing 59 percent of all transactions, trailed by the US dollar at 24 percent and the South Korean won comes in third, at 10 percent, according to CryptoCompare.

    The market capitalization of all existing cryptocurrencies is twice the volume of the Bitcoin market and stands at $300 billion.
    Some say Bitcoin might surpass the $10,000 threshold within a week. However, there’s little certainty, as Bitcoin’s year-to-date gains stand at some 900 percent, and the rally might be wearing out, as new ways of mining have emerged over the past several months.

    Related:

    Bitcoin Reaches All-Time Record of Almost $8,500
    Analyst: Bitcoin Could Be Temporary Bubble, But People Aren't Betting on That
    Bitcoin Surges to New Record High of $8200
    Tags:
    investment, cryptocurrency, Bitcoin
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