Wild swings for Bitcoin but price gains remain elevated

Kumutha Ramanathan
·Contributor
·2-min read
Representation of the Bitcoin cryptocurrency is seen in this illustration photo taken in Poland on November 29, 2020. (Photo illustration by Jakub Porzycki/NurPhoto via Getty Images)
Bitcoin is close to touching the coveted $20,000 mark. Photo: Jakub Porzycki/NurPhoto via Getty Images

Prices remain elevated for Bitcoin (BTCUSD) as the cryptocurrency continues to see wild swings on Tuesday.

It reached a new weekly high of $19,845 (£14,754.56), gaining about 3.3% at around 11:20am in London, flirting with the $20,000 level. It subsequently fell about 0.3% at around 11:40am.

Bitcoin has been rallying this week, successively reaching record highs despite wild swings.
Bitcoin has been rallying this week, successively reaching record highs despite wild swings.

“Some investors prefer it to gold, providing it with mainstream adoption,” said Edward Moya, senior market analyst at OANDA.

“Some will argue that this rally towards $20,000 will see a similar tulip-mania crash like we saw a few years ago, but in the 17th century tulip prices did not make a rebound following its crash like Bitcoin,” said Moya. “A safe-haven Bitcoin is not, but institutional and retail interest is strong and that could allow for bullish momentum to keep this trade going.”

The overall trajectory for Bitcoin has been upward this week, making it the most-traded digital asset. In 2010, it was worth less than $1.

READ MORE: European and Asian markets buoyed by COVID-19 vaccine hopes

Its unprecedented surge in interest of late has had a knock-on effect for miners of the cryptocurrency.

“While Bitcoin booms, many will be looking at how cryptocurrencies can be integrated into everyday financial transactions,” said Don Guo, chief executive officer of Broctogon Fintech Group. “News such as PayPal embracing cryptocurrencies and Facebook's Libra set to launch in January 2021 continue to suggest digital assets will remain on the main stage, and we expect further uptake due to such mainstream attention.”

He added that as popularity increases for Bitcoin, he encourages “the industry to prioritise liquidity provision through improving crypto infrastructure. This will ensure both old and new traders consistently have access to the best prices and that the industry reaches the next level of maturity."

Despite signs of market enthusiasm, some critics remain more reserved over the long-term trajectory for the cryptocurrency.

Vijay Ayyar, head of business development with crypto exchange Luno in Singapore, sees investors targeting up to $25,000, according to Bloomberg. After that he expects a 30% drop, since Bitcoin tends to “get everyone bullish and then dump,” he said.

Watch: How secure are cryptocurrencies?