Bitcoin’s Record-Breaking Rally Passes $34,000

Weeks after hitting $20,000 for the first time, the world’s largest cryptocurrency has become one of the world’s largest global assets.

Bitcoin reached a value of over $34,000 for the first time on Sunday, a scant three weeks after crossing the $20,000 threshold.

Already the world’s most popular cryptocurrency, Bitcoin now has a market capitalisation of over $600 billion, vying for position with the likes of Facebook and Tesla. It has also passed Visa’s market cap, placing it as the world’s largest financial service.

Cryptocurrencies flourished during 2020 as COVID-19 lockdown measures and fears of a global recession sent investors in search of alternative financial assets. Bitcoin in particular saw strong gains after PayPal announced that it would allow it and other cryptocurrencies to be traded on its platform, a key step towards the mainstream adoption of cryptoassets.

Overall, the price of Bitcoin surged by over 300% during 2020. In the opening days of 2021, its value has risen by almost $5,000, with an 18% jump on Sunday morning before gradually receding.

Equally impressive, new statistics indicate that Bitcoin’s 30-day average daily trading volume between 1 December and 31 December reached $39.1 billion, higher than the average daily trading volume of Apple, Amazon, Microsoft, Facebook and Alphabet stock during the same period ($37.68 billion).

“What’s happening now – and it’s happening faster than anyone could ever imagine – is that Bitcoin is moving from a fringe esoteric asset to the mainstream,” said Matt Hougan, chief investment officer at Bitwise Asset Management.

“If it’s going mainstream, there is just so much money on the sidelines that is going to have to come in and establish a position that it leaves me very bullish for 2021.”

In the coming weeks, US PayPal account holders will be able to trade digital coins including Bitcoin, Litecoin and Ethereum. PayPal also plans to expand trading options to Venmo and some new countries in the first half of the new year.

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