Crypto Volatility Picks Back Up – ETH All-Time High, BTC Over 60k US
After what is a prolonged period of price stability (at least in the crypto world), we saw Bitcoin break 60k (USD) and Ether set a new all-time high before both drew back down over the weekend. Let's delve into what's going on in the space and what is driving the latest price movements.
The Bitcoin price hit highs of just over $60,000 per bitcoin last month before falling back slightly but has since made up lost ground. Meanwhile, the broader cryptocurrency market has surged to almost $2 trillion—boosted by decentralized finance (DeFi) tokens.
Analysts at Wall Street banking giant and former bitcoin sceptic JPMorgan have said bitcoin could climb as high as $130,000 in the long-term if it continues to see its volatility converge with that of golds.
"Considering how big the financial investment into gold is, any such crowding out of gold as an 'alternative' currency implies big upside for bitcoin over the long term," JPMorgan analysts wrote.
The bank determined that a six-month measure of bitcoin volatility seemed to be stabilising around the 73% mark—suggesting "tentative signs of bitcoin volatility normalization" that could help to "reinvigorate" interest from institutional investors.
High volatility "acts as a headwind towards further institutional adoption," according to JPMorgan.
The bitcoin price has risen as institutional investors including London-based asset manager Ruffer and insurance giant MassMutual have bought into bitcoin—with Elon Musk's Tesla topping off a string of high-profile bitcoin bets.
The bitcoin price has climbed from around $10,000 per bitcoin to around $60,000 as a result, but JPMorgan thinks it could still have some way to run.
"Mechanically, the bitcoin price would have to rise [to] $130,000, to match the total private sector investment in gold," JPMorgan analysts wrote.
"After a stellar performance in the first quarter that saw the king of crypto record an all-time high of $61,700, bitcoin enters April leading a seemingly buoyant cryptocurrency market," Paolo Ardoino, the chief technology officer at British Virgin Islands-based bitcoin and cryptocurrency exchange Bitfinex, pointing to PayPal's announcement this week it will soon let users spend bitcoin and a handful of other cryptocurrencies at its 29 million merchants worldwide.
"As PayPal's recent announcement demonstrates, the inherent volatility of digital tokens is no barrier to their increasing use in payments. This rally could herald bitcoin's first meaningful encroachments into the legacy financial system and credit card industry."
Additionally, Bitcoin's biggest cheerleader Michael Saylor announced this morning that MicroStrategy has purchased an additional 253 BTC over the weekend – possibly being the driving force of the run-up on the weekend.
Even more impressive – Ethereum set a new all-time high over the weekend. The price has rallied 24% this week in the wake of Visa's decision to facilitate crypto-based settlements on the Ethereum blockchain network. Ether, the native cryptocurrency for Ethereum, has nearly tripled in price this year. In an announcement on Monday, Visa said it is working on a program to settle transactions in stable coin USD coin (USDC) over Ethereum with its partner Crypto.com.
Despite the lack of fireworks and explosions in the market lately, the crypto market cap continues to grind higher thanks to the alt-coin rally that has been occurring in the background over the last few weeks. Things certainly are heating up again…