Christopher Bendiksen, head of research at CoinShares, also cited continued corporate and institutional interest as well as post-Thanksgiving retail demand for bitcoin’s renewed surge.
“While circumstantial, price action really started picking up speed when the U.S. woke up this morning, which could reflect buying pressure from retail-oriented platforms such as Square’s CashApp, Robinhood and PayPal,” he added.
Square’s Cash App and PayPal, which recently launched a crypto service to its more than 300 million users, have been scooping up all new bitcoins, hedge fund Pantera Capital said in its letter to investors a fee weeks ago. That has caused a bitcoin shortage and has driven the rally in the last few weeks.
Bitcoin’s 12-year history has been peppered with steep gains and equally sharp drops. Compared to traditional assets, its market is highly opaque.
Analysts say the bitcoin market has evolved since 2017, now boasting a functioning derivatives market and custody services by major financial firms.
The shifts have made it easier for professional investors from hedge funds to family offices to seek exposure to crypto, and as a result markets are, in general, more liquid and less volatile.
Bitcoin’s march to its prior peak – reached after frenzied buying by retail investors from Japan to the United States – saw the cryptocurrency gain over 250% in just 35 days before losing 70% of its value in less than two months after its December 2017 high.
(Reporting by Tom Wilson in London and Gertrude Chavez-Dreyfuss in New York; Editing by Thyagaraju Adinarayan and Nick Zieminski)