The new year started phenomenally for bitcoin with the price soaring to new ATH every day reaching $42,000 at the time of writing.
The bitcoin price increased nearly 10 times since the last year dip in March when the Corona crisis started and the bitcoin price went down to $5,000. It is worth to mention that it has been a surge of institutional interest toward bitcoin that helped to push the price higher, such PayPal allowing their user to buy, sell and spend bitcoin.
Actually, with the increasing retail investors’ interest in bitcoin, a new research reveals how bitcoin whales accumulated bitcoin in December pushing the price to new highs.
“Bitcoin ‘whales,’ addresses with more than 100 bitcoin, accumulated an additional 47,500 bitcoin amid bitcoin’s ruthless rally throughout December,” researchers at the San Francisco-based bitcoin and cryptocurrency exchange Kraken wrote in a report out Thursday.
“Not only did the aggregate number of bitcoin in whale addresses hit its highest level all year, 11.46 million bitcoin, but addresses with a balance of more than 100 bitcoin surpassed 16,300—a reading last seen on March 16, 2020.”
This heavy bitcoin accumulation pushed the price up by 50% in December and with the price speeding up it added another 40% just in the first week of the new year.
Another narrative that may have helped to push the price up, is the massive amount of fiat money being printed by governments around the world and the name many investors are labeling bitcoin “digital gold” as a hedge against the fiat inflationary system.
“A Rubicon has been crossed with entirely new categories of institutions and corporate buyers; the retail fear-of-missing-out cycle is starting again; and this is all coming into a macro environment featuring significant tailwinds in the form of growing inflation expectations,” Nathaniel Whittemore, host of bitcoin analysis podcast The Breakdown, wrote in a note for Forbes.
“Compared to other macro hedges, bitcoin is not only cheaper but has much more attractive upside potential. Just because the price is more than it was doesn’t mean it isn’t still undervalued.”
However, others have cautioned bitcoin could be set for a correction.
“Whilst we think the future is very bright for the asset class, we still anticipate some bumps along the way,” David Mercer, the chief executive of FX and institutional cryptocurrency exchange LMAX Group, wrote in a note.
Despite short and mid-term market swings most of the crypto investors think that the bitcoin price will continue to increase over the long haul.
“This year we’ve seen the price move up past the $30,000 area due to the uncertainty gripping markets and whilst we do anticipate further dips, potentially down to the $15,000 mark, we do not think it is unreasonable to suggest bitcoin could push towards $50,000 in 2021,” Mercer added.