The world’s favorite cryptocurrency, Bitcoin, has been making waves on the financial markets recently. The reason for its return in the investment spotlight is a bullish trend that began in October.
Over the past two months, Bitcoin has increased by over $8,000 in value, peaking at $19,120 on November 24. But is the cryptocurrency’s rally here to stay? Here is how you can benefit from trading Bitcoin.
What Causes the Rally?
The last time Bitcoin reached highs close to $20,000 was in December 2017. At the time, the Chicago Board Options Exchange and the Chicago Mercantile Exchange both started trading Bitcoin.
As a result, the cryptocurrency climbed sharply on the expectation that it is finally finding acceptance on the financial markets.
The sharp increase observed in November 2020 had somewhat similar drivers. First of all, there was the greater risk appetite as the market broadly rejoiced that several vaccines will be widely available in 2021.
This can put an end to the pandemic once and for all and fuel economic growth.
In addition, PayPal recently added Bitcoin wallets. This could potentially bring millions of people into Bitcoin trading. Almost no vendors accept cryptocurrencies as payment methods due to their high volatility.
Thus, PayPal’s decision to open Bitcount wallets could prove revolutionary in this regard.
Long-Term Trend or Fluke?
The question on everybody’s mind is now whether Bitcoin can hold these levels, maybe reach new highs, or if it will drop again like it did in 2018-19.
According to renowned hedge-fund manager Paul Todor Jones, Bitcoin is set to do well in the coming months.
Due to the dovish monetary policy around the world, necessary to deal with the fallout from the pandemic, Jones believes traders will need an asset immune to inflation.
Bitcoin is the best candidate because it is not related to any other currency. It’s also not regulated, so it’s not subject to the policies of any central bank.
Another legendary investor, Bill Miller, also shares a similar view and is confident of Bitcoin’s success. In fact, the consensus on Wall Street seems to be that Bitcoin is due for a stellar performance.
Anthony Pompliano of Morgan Creek Digital predicts that if the demand for the cryptocurrency keeps growing, we could see Bitcoin hit $100,000 next year.
Note that Bitcoin’s value has dropped over the last few days, shedding over $2,000 in a short amount of time. Now is the key time to observe whether this is a correction after the steep climb, or a sign that investors are pulling back.
Thanks to its high volatility, Bitcoin has become one of the most interesting assets to follow in 2020. You can join millions of investors in trading Bitcoin by opening a Crypto account with SuperForex.
Disclaimer: The content of this article is sponsored and does not represent the opinions of Finance Magnates.