Bitcoin is approaching today its highest-ever price of $19,783 (£14.832), achieved in late 2017. BTC is trading for $19,291 (£14,463) per token on of Wednesday, November 25, at 12pm GMT, according to coindesk.com data.
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There are several theories to account for the slow and steady rise in value seen over the past three months.
We are currently witnessing extremely bullish price action in BTC – driven by a mix of market structure and strong fundamentals
These range from increased adoption of crypto by large institutions, emerging markets experiencing high inflation, to a traditional seasonal spike in cryptocurrencies.
Nicholas Pelecanos, Head of Trading at leading enterprise blockchain NEM, thinks several factors are in play.
He said: “We are currently witnessing extremely bullish price action in BTC – driven by a mix of market structure and strong fundamentals.
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Bitcoin price rise: The flagship cryptocurrency is closing-in on its 2017 all-time high (Image: Getty)
Bitcoin is approaching today its highest-ever price of $19,783 (£14.832), achieved in late 2017 (Image: Getty)
“Fundamentally, BTC is a much stronger asset now than it was then due to a number of factors, including the halving, a rise in institutional adoption, real-world use cases emerging, publicly listed US companies moving 10 percent of their balance sheet into the asset and payments giants like PayPal accepting crypto.
“Historically, BTC witnesses end of and early year rallies, so I wouldn’t be surprised if it reaches or sets new highs this year, or in the early part of 2021.
He added how altcoins – such as ripple and ethereum – are where money might be made, despite BTC generating the headlines.
Mr Pelecanos said: “BTC is back at its all-time high levels, but what is worth noting is the valuation of the altcoins which are on average still 50 percent below their all-time highs.
There are several theories to account for BTC’s slow and steady rise in value seen over the past three months (Image: Getty)
“Some altcoins represent projects that are no longer functioning, yet other projects have seen tremendous development on both adoption and tech.
“For me, catching these undervalued altcoins is now the trade to be made.”
Rachid Ajaja, CEO and co-founder of globally-compliant decentralised capital market AllianceBlock, believes there are tentative reasons bitcoin will not witness another crash like the one triggered in December 2017.
He said: “I believe BTC is and will become a store of value that will not only be a strong alternative to gold but also for emerging markets that are experiencing high inflation and therefore cannot use their currency – Venezuela is a prime example of this.
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“Still, only one thing is for certain: bitcoin will continue to surprise us, not only now, but for the next 20 years at least.
“In 2017, there was an old saying: ‘When your cab driver starts talking about bitcoin, it’s time to sell’.
“The subsequent crash in 2018/19 followed by the DeFi wave we are seeing now is a standard crypto cycle – crash, new concept, boom, crash.
“However, over the last couple of months we have seen interest in the crypto ecosystem build significantly from a number of integral parties, with a number governments introducing comprehensive crypto legislation alongside plans to launch CBDCs.
Increased adoption of crypto by large institutions and emerging markets experiencing high inflation are just two explanations (Image: Getty)
“Leading global enterprises like PayPal have even made plans to integrate crypto into their core service offerings.
“These are good signs for any investor looking at the market. In addition, it is easier now than ever before to get involved in crypto as the technology has become much more accessible to retail users.
“I think this too is having a massive impact on uptake.”
However, other experts have warned would-be investors of the dangers they believe are inherent with crypto.
Kevin Muir, a trader based in Canada, said: “Any hedge fund model on bitcoin is rubbish.
“You can’t model a mania. Is it plausible? For sure. It’s a mania. But does anyone actually have a clue? Not a chance.”
And Bank of England Governor Andrew Bailey recently said he was “very nervous” about people using bitcoin to make payments.
Mr Bailey previously warned those who invest in the cryptocurrency should be prepared to “lose all their money”.