On Dec. 16, Bitcoin (BTC) reached another milestone after it finally hit the $20,000 mark. And what’s even more remarkable, the price of the cryptocurrency continues to rise. As of writing, BTC is now trading at $23,167. This is a 16.46% increase from its last recorded all-time high on Dec. 1 at $19,892.
Although the bitcoin price had plummeted below $16,000 last Nov. 14 it has immediately rebounded after 24 hours. On Nov. 29, it recorded an all-time high after its price surge at $18,209 on Binance. On Nov. 30, it has already passed the $19,000 mark. This has further fueled the expectations of bitcoin enthusiasts that the anticipated bull run of bitcoin reaching its $20,000 all-time high last 2017 will happen again this year.
And finally, it is now happening with the price of bitcoin trading above the $20,000 mark. But what could have fueled the recent price rally? According to experts, the recent institutional demand is one of the major factors that had caused the price surge. A recent report by Grayscale Bitcoin Trust stated:
“More institutions invested in 3Q20 than ever before and have increased their average allocation from $2.2 million in 3Q19 to $2.9 million in 3Q20. Institutions that are comfortable with multiple products within the Grayscale suite of products, have averaged nearly double the commitments of single-product investors during 3Q20.”
Guggenheim Investments has invested 10% or $5M of its net asset value to Bitcoin indirectly through Grayscale’s Bitcoin Trust product (GBTC).
Microstrategy has a total holding of BTC 75,324 including its recent purchase amounting to $650M. With bitcoin’s current price, the company has now $1,745,031,108 in its treasury.
The adoption of bitcoin as a primary treasury asset has resulted in the current spike in demand and pushed its price to an all-time high.
But will the current price remain sustainable? It can be recalled that in 2017, the bitcoin price took a sharp dive after reaching its all-time high at $20K. Experts have high hopes that the recent bull run will be different due to adoption by institutional investors. Since bitcoin is now viewed as a safe-haven asset, institutional investors are not very keen to sell when prices go up. They intend to hold the asset on a long-term basis. This is contrary to retail and mainstream investors who would sell whenever an opportunity to gain profit arises.