Bitcoin Is Eyeing $12,000 in New Show of Strength
Bitcoin accelerated over the weekend, with prices reaching new all-time highs ahead of the planned launch of a new futures contract later this month.
New Peaks Eyed
BTC/USD reached a session high of $11,839 on Sunday, enough for a new record peak. At press time, bitcoin was trading at $11,133, having gained 2.1% on the day. That’s still equivalent to $278.
The new highs give bitcoin a total market cap of $187 billion, easily tops among the 1,200 or so cryptocurrencies. Prices have now gained more than $2,500 over the past five days, a startling climb even by bitcoin’s standards.
Bitcoin’s 24-hour trade volumes once again surpassed the $6 billion mark on Sunday. Bitfinex was responsible for roughly 15% of the global turnover. South Korea’s Bithumb was second with a little more than 6%.
Rubbing Shoulders With Fiat Currency
Bitcoin’s nearing of the $12,000 price level puts it on par with some of the world’s leading fiat currencies. A mere eight years after its launch, bitcoin is now sixth most valuable currency in circulation, according to CCN. The advance also pushed the total market capitalization of all cryptocurrencies past $350 billion for the first time.
Although bitcoin’s value is on the rise, its transaction capacity is still the subject of concern. Challenges with creating a more scalable cryptocurrency have already led to multiple hard forks in the blockchain.
Last month, developers backed out of the highly anticipated Segwit2x fork, which would have doubled the size of the blocks stored in the blockchain from 1 MB to 2 MB. The hard fork failed to launch due to a lack of consensus within the community.
After an initial selloff, bitcoin returned to strength in the days following the Segwit2x hiccup. Prices have been on a tear ever since.
Various media outlets have speculated that Tyler and Cameron Winklevoss are the world’s first bitcoin billionaires. The twin brothers successfully sued Mark Zuckerberg for stealing the idea for Facebook. The $10 million proceeds from the lawsuit have gone toward building a massive holding in bitcoin.
The brothers have major plans to launch the first bitcoin exchange-traded fund (ETF), but have yet to satisfy SEC requirements.
The world’s most active digital currency still has plenty of scope for further gains in the short and medium term thanks to the planned introduction of bitcoin futures later this month. CME Group will become the first major exchange to offer BTC futures. Next year, CBOE and Nasdaq are expected to follow suit.
Although bitcoin’s long-term trajectory is subject to great speculation, one strategist for sees much higher prices in the future. Strategist Tom Lee recently told CNBC that bitcoin is “digital gold” that could easily achieve the $100,000 price range.
“It’s valued as if it is a small company today,” Lee said on Squawk Box “We think over the next 10 years, this new generation of millennials are going to view trust as a replacement for gold. So, bitcoin is essentially digital gold for another generation.”
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.