When the value of Bitcoin crashed by $3,000 last month through Thanksgiving (after large-volume profit-taking began to drag on prices), the asset’s supposed correction didn’t last particularly long.
More specifically, this week has seen Bitcoin’s price surge to $19,857.03, bringing its year-to-date gain to 177% and breaking its intraday record set way back in December 2017. Back then, Bitcoin broke the $20,000 barrier for the first time, and it remains on course to repeat this achievement before the end of 2020.
This highlights the renewed resilience of Bitcoin, but what does it tell us about the maturing cryptocurrency market as a whole? Let’s find out.
How Bitcoin Has Performed Throughout 2020?
The way in which Bitcoin has hit fresh highs has certainly gained the attention of investors, particularly after its sudden and largely anticipated price crash last week.
While many thought that this represented an overdue correction and the beginning of a longer-term trading trend, however, Bitcoin has showcased incredible resilience and strength this week.
As a result, it has continued to push towards the psychologically significant $20,000 level, which is considered to be the next stepping towards Bitcoin assuming its full market value in the coming years.
According to Craig Erlam from Oanda, this rally could certainly kick into a higher gear if this critical price barrier is overcome in the weeks ahead, creating a scenario where other cryptocurrencies’ values could soar as a result.
Certainly, this will pique further interest in Bitcoin, creating an ever greater boost to near-term prices.
Of course, Bitcoin has been embarked on an upward trajectory ever since the first quarter of 2020, and this has much to do with the fact that cryptocurrencies as a whole have benefitted from a sustained maturing process.
The coronavirus pandemic has also had a surprisingly positive impact, despite its initial surge causing the token to lose 25% of its value in March. Since December last year, its price has more than doubled, as investors have sought out asset classes that are finite in their nature and less susceptible to macroeconomic factors.
In this respect, some now consider Bitcoin to be a safe haven asset in the same mould as gold, and this has attracted a brand new demographic of investors across the globe.
Will This Trend Continue in 2021?
For now, it appears as though Bitcoin is poised to maintain similar growth levels in the near-term while blazing a trail for similar assets to follow in the process.
However, there remain concerns about the extent of the Bitcoin rally and its aggressiveness, as historical trends suggest that the token is prone to crashing and burning after exponential growth.
This was the case following Bitcoin’s price run in 2017, as by the summer of 2018, the token’s value had declined from a high of more than $2,000 to around $8,000 overall.
However, there are some signs that a more mature Bitcoin will be able to sustain high levels of growth more easily, particularly as coronavirus uncertainty continues to plague the market. This will certainly be an interesting space to watch into 2021, and investors will be sure to trade carefully as the next year unfolds.