Bitcoin prices were taking flight on Monday, pushing the digital currency to the highest level in about two months and ending the long dormancy of the world’s No. 1 virtual asset.
Bitcoin, the largest and most influential cryptocurrency, shot past the key $10,000 resistance marker—all eyes are now on the critical $10,500 level,” wrote Nigel Green, chief executive and founder of deVere Group, a financial firm, advising some $12 billion.
Bitcoin’s recent rally to $10,237 took it to around its highest level since June 1 based on spot prices.
Bitcoin futures trading on CME Group were at $10,335, the highest since June 2, according to FactSet.
The move for the digital currency comes as gold prices have surged, amid a rush for assets that considered alternatives to cash and stocks fueled by the COVID-19 pandemic that has driven much of the developed world into a deep recession.
Gold prices rallied to an intraday peak at $1.941.90, up more than 2%, and taking out an intraday record for the most-active intraday at $1,923.70 an ounce that had stood since an ounce from Sept. 6, 2011.
Prices for gold and bitcoin have climbed as a gauge of the U.S. dollar hit its weakest level since 2018. The ICE U.S. Dollar Index was trading down 0.7% at 93.736
As gold prices have neared a round-number record at $2,000, bitcoin has seen mostly listless trade even as concerns about the virus and outsize spending by governments to help prop up economies battered by pandemic have supported bullion prices.
Some digital-currency bulls believe that bitcoin is starting to benefit from some of the same dynamics that have lifted gold but in delay.
“Bitcoin is currently realizing its reputation as a form of digital gold. Up to now, gold has been known as the ultimate safe-haven asset, but Bitcoin—which shares its key characteristics of being a store of value and scarcity—could potentially knock gold from its long-held position in the future as the world becomes evermore tech-driven,” Green said.
“Well, one possible reason [for bitcoin’s gains] is the rising stablecoin market cap, wrote Simon Peters, cryptoasset analyst at eToro, in a Monday research note. “For example, Tether (USDT) crossed the $10 billion mark this month and USD Coin (USDC), Circle’s stablecoin, is also at its highest level, having reached a market cap of over $1 billion. Perhaps some of this liquidity has made its way into bitcoin,” speculated Peters, referring to the popular stablecoins Tether and USD Coin, which is managed by a consortium of companies, including Coinbase Inc. and Circle Internet Financial Ltd.
Stablecoins, which usually trade at a 1-to-1 ratio to the underlying asset, have become popular because they can smooth out the volatility typically associated with bitcoin and can make virtual assets more compelling as digital currencies.
Bitcoin’s brief breakout to above $10,000 in June didn’t amount to much, but some investors are now betting that the asset go touch $15,000 and beyond.
“The Bitcoin price crossed above the 10K mark and the price action looks bullish now as the price has cleared a major psychological level that has been there for a long time,” said Naeem Aslam, analyst at AvaTrade, in a research note.
“If the Bitcoin price does pick up the momentum, nothing else will be able to match it as Bitcoin is a different kind of beast. We believe, the next resistance for the Bitcoin price is 15K now,” he said.