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Bitcoin on Longest Winning Run Since 2019 After Topping $28,000

It just keeps going and going.
(Lukasz)
(Lukasz)
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Bitcoin’s winning streak continues, as it prepares to have its best month in more than a year, Bloomberg reports.

Why It Matters: The cryptocurrency hit an all-time high of $28,365 on Sunday before receding a bit, according to Bloomberg data. It’s an impressive run for Bitcoin through October, November and December, which has seen its best stretch of returns since the mid-point of last year.

Monday Outlook: Bitcoin jumped up roughly 3.6% to around $26,700 as of noon in London. CoinMarketCap has it approaching $27,200 as of 10 a.m. ET. Overall, the cryptocurrency is up around 270% year-to-date.

Remind me, why are we obsessed with Bitcoin? “Believers see it as a hedge against dollar weakness and the risk of faster inflation amid huge stimulus injections, and cite growing interest from institutional buyers. Others question Bitcoin’s validity as an investment and point to the digital currency’s history of wild rallies followed by crashes.”

However, let’s pump the brakes. Regulatory scrutiny of the digital currency is still in its infancy and should be a variable investors consider.

  • Ripple Labs and its top executives just got in trouble for allegedly “misleading investors in affiliated token XRP.”
  • While it plans to challenge the claims in court, the situation underscores the oversight dilemma facing digital currencies.

The Final Word: Vijay Ayyar, head of business development with crypto exchange Luno in Singapore, says Bitcoin could reach $30,000 soon, though it would be a ceiling. When Bitcoin does pullback, though, he estimates it would be in lesser, 10% to 15% drops instead of the mega-volatility of days past.

Justin Oh:

Forgive us if the Bitcoin coverage gets repetitive, but it’s worth continuing to write about, especially for new subscribers to our content. 

We have had Bitcoin as a core holding on the Big Board since inception and its recent rally has been a great contribution to our outperformance. We continue to be long-term bullish from a fundamental basis even from $27,000. Please watch my overview video on Bitcoin if you haven’t already and are curious about the general thesis.

For what it’s worth, I’ve seen some interesting Stock-To-Flow models projecting $50k and $100k+ Bitcoin before the rally crashes. But we are anchored in fundamental analysis, so I don’t have predictions on Bitcoin’s near-term price movements. 

That said, we are tracking certain metrics that I’ve learned from the last rally in 2017 and are not completely against reducing exposure if we feel Bitcoin is getting too frothy.

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