After testing investor patience for three weeks, bitcoin surged past $20,000 to reach fresh all-time highs and is currently trading above $21,000.
The number one cryptocurrency by market value jumped over the key psychological threshold during the early U.S. trading hours, surpassing the previous peak price of $19,920 recorded on Dec. 1. At the current price of $21,123, bitcoin is up 8.8% over 24 hours, according to CoinDesk’s Bitcoin Price Index (BPI).
"When this [rally to near $20,000] happened in 2017, there was a real lack of products for the new converts to experience, whereas today there are endless uses, protocols, services across farming, lending, standard trading, etc," Soravis Srinawakoon, CEO and co-founder of cross-chain data oracle Band Protocol told CoinDesk. "Therefore, we’d expect to see the new adopters hang around this time."
Breaking above $20,000, which represented a significant hurdle in the mindset of most traders, is entirely new ground for bitcoin and opens the doors for a climb to $100,000 over the course of 2021, according to some.
That rise would bode well for other crypto sectors as well, including decentralized finance (DeFi), according to DversiFi's CEO Ross Middleton.
“Bitcoin profits are partially recycled back into other smaller tokens later in the bull cycle. In 2017 that was other blockchains such as Ripple, Litecoin and EOS," said Middleton. "However, this time around, funds are likely to flow into the new crop of DeFi blue-chip projects, built on Ethereum."
DeversiFi's CEO pointed to DeFi protocols Aave, Compound, Synthetix and Yearn Finance as his picks of where the capital could flow.
And while bitcoin is now up over 180% on a year-to-date basis, gold has added just over 22%. Bitcoin, often touted as digital gold, has decoupled from the yellow metal this quarter with a more than 80% rally. Meanwhile, gold has suffered a 1% drop, with investors pulling money out of exchange-traded funds.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is an award-winning media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. In November 2023, CoinDesk was acquired by Bullish group, owner of Bullish, a regulated, institutional digital assets exchange. Bullish group is majority owned by Block.one; both groups have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary, and an editorial committee, chaired by a former editor-in-chief of The Wall Street Journal, is being formed to support journalistic integrity.