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Bitcoin Wrap: A Bullish Week for the King

February 6, 2021 at 11:01 by Ibrahim Anifowoshe

The last 24-hour range of Bitcoin was between $36,637 to $39,881. At 11:04 GMT on Saturday, the pioneer cryptocurrency was trading at $39,881, gaining a whooping 6.63% in the last 24 hours.

The price of Bitcoin is now in the fifth day of an upward momentum. Going as high as almost $40k as the weekend began. There are signals that show that retail adoption of the king cryptocurrency may point to why it’s seeing a bullish outlook.

Michael Gord, chief executive officer for trading firm Global Digital Asset, noted that:

Similar to the last bull run, we are seeing bitcoin initially steal the attention as retail adoption pours in through mainstream attention

Despite this bullish outlook, Gord told CoinDesk that it seems that traders are rotating out of Bitcoin to other high-flying digital assets:

Bitcoin then cools off and profits generated from bitcoin find themselves first in ether, then in other high market-cap digital assets

Notwithstanding, Ray Dalio of Bridgewater Associates, which manages $150 billion in investor money, has some thoughts on this including quantitative trading firm QCP Capital highly bullish on Bitcoin. The QCP weekly investor note Friday noted that if 50% of capital invested in gold moved to BTC, a forecast of $85,000 per Bitcoin is possible.

The investor note noted:

Bridgewater’s piece out last week had a sensitivity analysis which showed their estimates of BTC price, should private holders of gold switch to BTC. They forecasted that should 50% of capital in gold move into BTC, that would result in a price of $85,000 per 1 BTC.

gold and bitcoin charts

Volatility concerns continue

The volatility of Bitcoin is still a concern as investors look to Bitcoin as an asset class. The volatility of the coin in the 30-day range from Thursday’s close was at 102.9%. This is a total opposite on an annualized basis when compared to 16% volatility for gold.

As investors fear for Bitcoin, it appears that crypto assets remain valuable. Bitcoin has gained 29% in 2021 so far. But Ethereum has returned almost quadruple, gaining 129% since the start of the year.

Joel Edgerton, chief operating officer of cryptocurrency exchange BitFlyer USA gave a probable reason:

My guess is that BTC is like gold and priced by the value it stores, a scarce commodity in price discovery. ETH is more like a stock and priced by the value it delivers (ETH 2.0, network effects, basis for DeFi).

eth and btc in the year

Watching the trading charts during heated hours of ETH/BTC trading pair revealed that traders are selling their Bitcoin for Ether.

Jason Lau, chief operating officer of San Francisco-based crypto exchange OKCoin mentioned that ETH has seen more focus because of Bitcoin consolidation:

While bitcoin consolidates and trends back towards all-time highs, much of the price action has focused on the ETH and DeFi space.  ETH/BTC has almost doubled in the last month.

If you have any questions and comments on Bitcoin today, use the form below to reply.

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