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HONG KONG: Bitcoin surpassed US $ 29,000 to hit another record high on the final day of 2020, showing no signs of slowing down from its torrid December rally.
The largest cryptocurrency rose to $ 29,292 before falling back slightly to trade at $ 28,972 at 11:30 am in Hong Kong yesterday. It has advanced almost 50% in December, on the way to its biggest monthly gain since May 2019.
“The key to this rally is that it has been sustained for several weeks,” said Matt Long, head of distribution and main products at Hong Kong-based cryptocurrency brokerage OSL.
“If we see a break to the downside, it will be instructive about the direction of first quarter flows if we see institutions continue to buy in a possible dip.”
Bitcoin has now more than quadrupled in value this year amid the global coronavirus pandemic, while the broader Bloomberg Galaxy Crypto Index that tracks the largest digital currencies is up about 280% as rival currencies like Ether have also rallied. have recovered.
The latest price surge continues to divide opinion between those who see cryptocurrencies as a hedge against dollar weakness and inflation risk, and others who question the validity of Bitcoin as an asset class given its speculative nature and boom cycles. and fall.
“In my opinion, a lot of things are being validated,” including Bitcoin’s role in finance and as a store of value, said Vijay Ayyar, head of business development at Luno exchange in Singapore.
“Bitcoin is now a real alternative.”
That said, the massive bitcoin rally in December also has at least one technical indicator flashing red, suggesting that the coin is “near a ceiling,” Ayyar said. The digital asset is in overbought territory according to its relative strength indicator.
Regulatory concerns also remain a broader factor for crypto investors. The Securities and Exchange Commission earlier this month accused Ripple Labs Inc. and its top executives of misleading investors in the affiliated XRP token. While Ripple plans to challenge the accusation in court, the development underscores the prospect of stricter oversight of digital assets.
XRP has plunged nearly 70% this month and faces increased pressure with Coinbase, the latest exchange to announce plans to suspend trading of the token. – Bloomberg
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