Bitcoin, the world’s largest cryptocurrency by market capitalization, has been on a tear in recent weeks, having surpassed $26k again.
According to data from CoinMarketCap, the price of bitcoin reached $26,200, up more than 5% over 24 hours. The price spike coincided with a drop in trading volume, leading some analysts to suggest that the market may be illiquid and subject to large price swings.
Despite this concern, many investors and traders remain optimistic about bitcoin’s prospects, pointing to a number of factors that could fuel further growth in the coming months. One such factor is the growing interest in cryptos by institutional investors, who are seen as a key driver of demand for bitcoin and other digital assets.
Another factor is the current economic uncertainty caused by the COVID-19 pandemic, which has led many people to seek alternative investments to protect themselves from inflation and other economic risks. The limited supply and decentralized nature of bitcoin make it an attractive option for those looking to diversify their portfolios and protect their wealth.
For the director of research at Kaiko, the recent rise is partly due to low liquidity in the market and a “huge buying pressure.”
Binance converting $1 billion of BUSD into BTC, ETH and BNB and other tokens has been the fuel,” commented Clara Medalie, on Coindesk.
The analyst also noted that the correlation between the traditional stock markets and the crypto market was breaking down. “It flipped this week. We’re seeing the crypto markets rally, while the stock markets have completely collapsed,” she said.
More broadly, over 24 hours, most crypto stocks are in the green. Bitcoin (+5%), ETH (+4%) and BNB (+6%) are outperforming much of the market, which now has a global market cap of about $1120 billion.