Weekly Market Recap - Dec 21
Overview
Bitcoin is finally through $20k, reaching as high as $24k yesterday before pulling back between $22k and $23k. This is a monumental mark for BTC that resulted from institutional demand, instead of the retail crowd that was the catalyst for the move in 2017. Investors continue to buy on the dips, and there is now a critical support level around 20k. However, many analysts still believe a price correction is inevitable and will require new institutional money for BTC to continue its trend upward towards $30k.
Market Recap
On Sunday, congressional leaders reached an agreement on a $900 billion stimulus package, a second round of stimulus checks for eligible Americans. Although this package provides needed short-term relief, the long-term impact of the bill means a weakening U.S. dollar, and strengthens the case for buying Bitcoin.
Institutions continue their adoption of Bitcoin in big ways. Christopher Wood, global head of equity strategy at Jefferies, announced that the firm is converting some of its gold holdings into BTC, and will increase the exposure to cryptocurrency if the market sees a correction after the recent pump. Scott Minerd, CIO at Guggenheim Partners, recently told Bloomberg that the firm’s valuation models suggest BTC could go as high as $400,000. This comes off the news at the end of last month, where Guggenheim reserved the right to invest 10% of its Macro Opportunities Fund into the Grayscale Bitcoin Trust.
MicroStrategy, a business intelligence company known now for purchasing large amounts of BTC, now holds a total of 70,470 BTC, which is more than the United States government. MicroStrategy’s CEO, Michael Saylor, has been in talks with Tesla’s CEO Elon Musk on Twitter about converting the balance sheet from USD to BTC. As stated earlier, an inflow of new institutional money will decide whether BTC continues its trend upward, and interest from big names like Tesla certainly would drive the price up if they were to get involved.
Like last week, most altcoins continue to mirror the price movement of BTC. Ethereum is growing at a slower pace than BTC is, while Litecoin is growing at a faster rate. Two coins are an exception to this: GRT and DOGE. The Graph (GRT) has made waves since it started trading on Thursday, starting at $0.13 and currently sitting at $0.57. The Graph is an indexing protocol as well as global API for organizing blockchain data, and GRT is the network’s native token. Dogecoin (DOGE) saw a 20% increase after Elon Musk tweeted about the coin, showing how an influential figure can wildly affect an altcoin’s price through social media.
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