by AFIQ AZIZ / pic by BLOOMBERG
BITCOIN may be able to retest its all-time high on growing investors’ confidence and a shift in investment preference.
According to Tokenize Technology (M) Sdn Bhd, this is attributable to multiple events which lure investors to put in their money in the new haven asset class.
In the last 30 days, bitcoin’s price had surged by 54.43% from only US$11,460 to the highest of US$18,157 (RM74,262) as of yesterday noon, based on data by coinmarketcap.com.
The leading cryptocurrency’s value surged by 19-fold to US$20,000 in December 2017 within a 12-month period.
Currently, bitcoin’s price is 100% more than what was recorded in January, when it was only valued at only US$7,271.
Additionally, this is also the first time for the largest cryptocurrency to pass the US$17,000 mark since December 2017.
“In the third quarter of this year (3Q20), we can see many institutions have come to invest in bitcoin.
“Based on the technical chart, we can clearly see the key resistance of US$14,000.
“As such, the price may retest the US$14,000 mark before heading to US$20,000, or it can progressively move toward that level from here.
“It is believed there is a higher than 50% probability that the price would be able to retest the US$20,000 value before the year ends,” Tokenize Technology CEO and CTO Hong Qi Yu told The Malaysian Reserve (TMR) yesterday.
Bitcoin, which dominates 65% of more than 7,700 cryptocurrencies in the market, is now valued at US$337 billion in terms of market capitalisation, surpassing the December 2017 level which stood at US$320 billion.
According to coinmarketcap.com, the total market capitalisation for the cryptocurrency market has reached more than US$511 billion now.
Hong said the interest of institutional buyers for bitcoin has instilled investors’ confidence to push bitcoin’s value further in the near future.
Another digital asset exchanges in the country, Luno Malaysia Sdn Bhd, believes that several interesting developments in the world have also influenced the take-up on cryptocurrency market, especially bitcoin.
Among others are the concerns around quantitative easing (and Covid-19) stimulus programmes around the world, leading to monetary inflation and currency debasement.
“Many investors are moving their cash to assets which are perceived as better stores of value like gold and bitcoin,” Luno Malaysia country manager Aaron Tang told TMR.
Grayscale Investments — which is the world’s largest crypto asset manager, whose assets under management (AUM) are often viewed as a barometer of institutional interest — reported AUM increase by more than US$1 billion in 3Q20 alone.
Early this week, Grayscale announced that its total AUM has reached almost US$10 billion.
“More recently, Square Inc (led by Twitter Inc co-founder Jack Dorsey) announced it had converted US$50 million (or around 1% of its assets) into bitcoin,” Tang said.
“PayPal Holdings Inc has also announced it now allows its US customers to buy, sell and hold bitcoin, with plans to roll out this service to other countries in 2021.
“Paypal is also planning to allow cryptocurrencies to be used at 26 million merchants on its network starting next year,” Tang added.
However, Tang remains cautious on any cryptocurrency value prediction as it is always difficult to make short-term price predictions due to market volatility.
“What we can say is we are longterm believers in bitcoin’s technology and its value in the long term.”
As for the local market, Tang said Malaysian investors’ appetite for bitcoin and cryptocurrency has grown in tandem with price action and global markets.
As of now, he said there is no clear correlation between government policies — like the introduction of stimulus packages — and Malaysians’ behaviour when it comes to investing in cryptocurrency.