The crypto giant, Bitcoin has been on a bullish run, as investors’ appetites for technology stocks rejuvenates and the stimulus package announced by the Joe Biden administration causes investors to hedge against the weakened dollar.
As stimulus was set to reach households this weekend, bitcoin made a historical move. Bitcoin has surpassed the previous high of $58,000 set last month. Despite the troubling pull back, the crypto giant has had a bullish victory for 7 straight days as of March 11, 2021, but saw a pullback on March 13, 2021 to $57,800. Currently, Bitcoin is at $60,000 as at the point of writing this article.
Analysts believe that the surge is due to the attention created by investment banks, companies, and high net worth individuals. Even the world most valuable bank; JP Morgan, created an investment note on companies with the purchase of Bitcoin on their balance sheet. Golden Sachs president Waldron has indicated that he has seen an increase in demand for bitcoin this week.
Typically, Bitcoin advocates have perceived the asset as a hedge against inflation since it is decentralized and not tied to any central bank. Africa’s largest economy, despite the cryptocurrency ban issued by the Central Bank of Nigeria, has seen a 15% increase in P2P bitcoin transactions showing its resilience to the impact of government policy.
Also, the European Central Bank’s intention to increase the bond purchase can be seen as a potential push to the Bitcoin bullish run. Analysts believe that more stimulus could weaken the dollar which is advantageous to the bull run of bitcoin.
Market sentiments about Gary Gensler, and his recent victory in confirmation hurdle to the position of the Chair of the Securities and Exchange Commission (SEC) are seen to be favourable to the crypto world. Despite his claims to crack down on money laundering, he is seen as a forward thinker.
Regardless of the claim that Bitcoin is to be a safe haven, the assets remain speculative as it only recently had a correction to $43,000, giving credence to the speculative nature of Bitcoin. Hence, it would be prudent to diversify your portfolio and take a cautious position. Most analysts still believe that bitcoin still has a bullish tendency, but how long is the question lingering in everyone’s mind?