Bitcoin price cracks US$40,000 – has it peaked yet?
Bitcoin has hit US$40,000 despite only breaking the historical US$20,000 all-time high just over 3 weeks ago.
- Bitcoin doubles previous all-time high in just over three weeks.
- Cryptocurrency market cap breaks $1 trillion.
- Galaxy Digital CEO says stimulus cheques going straight to crypto markets.
Bitcoin broke through the US$40,000 (AUD$51,500) mark earlier today, reaching a high of US$40,180 before retracting to around US$39,518 at the time of press. The day's low, which was recorded almost 24 hours ago, was US$34,537 according to Coinbase. That marks an increase of 16.3% over just 24 hours, breaking through the major psychological barrier of US$40,000 in the process.
This new benchmark comes as a string of all-time highs are stoking market hype. It has been just over three weeks since Bitcoin broke through the historical ceiling of US$20,000. An all-time high that was set in the bull run of late 2017.
Cryptocurrency market capitalisation hits $1 trillion
The value of all cryptocurrency assets including Bitcoin has reached US$1 trillion as of 7 January 2021. During the bull market of late 2017 cryptocurrency market capitalisation only reached US$828 billion.
In terms of market capitalisation, digital assets have doubled in the month to date coinciding with Bitcoin's rally alongside Ethereum, which cleared US$1,200, a high not seen in three years. Combined, both assets are presently accounting for 86% of the digital assets market, with Ethereum accounting for an impressive 13% alone.
Market distribution of cryptocurrencies by market capitalisation. Source: CoinMarketCap
Bitcoin's market dominance is performing strongly with this latest bull run. In September of 2020, Bitcoin's market dominance was 56% and as its price began increasing, its market dominance grew to 71% as of 3 January 2021 pulling back by the time of writing to 68.45%.
Mirroring the bull run of 2017, Bitcoin's market dominance is increasing relative to the rest of the cryptocurrency market, suggesting investment in Bitcoin is growing faster than any other cryptocurrency. Of the top ten most popular altcoins only one appears to have made good strides, with Ethereum market dominance growing by just over 2% to 13.78%.
The total cryptocurrency market capitalisation excluding Bitcoin is currently US$315 billion. During the 2017 bull run, that figure was much higher at US$551 billion, highlighting how much confidence the market is placing in Bitcoin comparative to the wider market.
Novogratz says COVID stimulus bound for crypto markets
Galaxy Digital's CEO Mike Novogratz held an interview with CNBC's Squawk Box against the backdrop of a Wall Street seemingly unfazed by violence on Capitol Hill yesterday as CNBC's headlines read "Markets rally as protesters disrupt electoral college vote."
Novogratz was talking about the current Bitcoin bull run, its causes and where it might rally to. Concluding that the outlook for Bitcoin's price is positive suggesting that a large amount of the upcoming $900 billion COVID-19 stimulus could find its way into digital assets markets.
Without giving exact data he said what was "unique" about the last round of welfare handouts was the number of people that bought Bitcoin with "the exact amount of stimulus", suggesting that the stimulus cheques are being funnelled into cryptocurrency markets.
"When it comes to the young people's hands they are going right to their @RobinhoodApp accounts," says @Novogratz on stimulus driving market gains. "One of the most unique things last time was seeing how many people bought #bitcoin with the exact amount of stimulus. Boom. Boom." pic.twitter.com/DuazhcEeUC
— Squawk Box (@SquawkCNBC) January 7, 2021
Bitcoin was trading at US$39,518 at the time of press.
Disclosure: The author owns a range of cryptocurrencies including at the time of writing