Bitcoin price update: Volatility peaks as price stalls
Bitcoin continues to oscillate as it struggles to break through the next barrier at US$35,000.
- The price of Bitcoin jumps nearly 15% over 24 hours.
- JP Morgan suggests money is flowing out of gold into Bitcoin, which could lead to a price of US$146,000.
Over the last 24 hours, Bitcoin has moved from a low of around US$29,900 (AUD$38,600) up 14.5% to a top of US$34,260 (AUD$44,200). This is the second time this week that such volatility has occurred. On Sunday 3 January the price of Bitcoin jumped in a similar range, starting at just under US$30,000 and shooting through by 15% to the US$34,500 mark in only 24 hours.
The very next day there was a brief, though sudden correction. Bitcoin plummeted from US$33,500 to as low as US$29,700 losing 11% over a period of 6 hours. However, the correction was short-lived and demonstrates that demand is still high after nearly 9 months of upwards price action since March 2020 lows of around US$5,000.
The increase witnessed this past week forms part of a larger surge in Bitcoin's price which began in earnest around September. Today's price is more than 3 times the amount that it was in late September at around US$10,500, an increase of over 219%.
Bitcoin price forming a parabolic pattern in recent months. Source: TradingView
JP Morgan suggests Bitcoin is already replacing gold
Bitcoin's continued momentum suggests that global markets are now seeing Bitcoin as a potential hedge against inflation. Wall Street acceptance of Bitcoin appears to extend to the idea that Bitcoin is in direct competition with the oldest form of money, that being gold itself.
JP Morgan sent a note to investors last week stating that "Bitcoin's competition with gold has already started in our mind", indicating that there has been US$7 billion worth of outflows from gold-back derivatives while also US$3 billion has flowed into the Grayscale Bitcoin Trust. Furthermore, they joined the ranks of Bitcoin optimists, suggesting that the price could reach as high as US$146,000 if it becomes an accepted safe-haven asset.
As at the time of press Bitcoin had levelled off slightly, exchanging at US$33,977.
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Disclosure: The author owns a range of cryptocurrencies including at the time of writing