If you’ve been watching the crypto markets over the past few weeks you’ll have noticed something special: bitcoin, everyone’s favourite decentralized digital currency based on hype, lies, and general malfeasance, is about to hit $US20,000 ($27,206) — if it can break through what is known as a “resistance zone,” a financial term describes a price that an asset just can’t reach.
The currency was last at $US20K on December 17, 2017, during a runup that brought thousands of new “investors” into the marketplace. I distinctly remember seeing the busboy at a restaurant buying bitcoin and ignoring his boss that December, a corollary to the old Wall Street saw that when your shoeshine guy is giving you stock tips then it’s time to sell. Whether or not this boom will lead to a bust is unclear, but all signs point to “Yes.”
The rise in BTC price usually coincides with global unrest or radical changes in the bitcoin algorithm. The currency itself appeared during the 2008 crash that took out financial firms across the globe and the last boom seemed to coincide with a crackdown on crypto by multiple world governments. Cryptocurrency fans see the digital tokens as a hedge against political unrest — the kind of political unrest that could follow the election of a major world leader.
One baby wall and one mama wall and then the frenzy begins pic.twitter.com/vu7nH93NwT
— Vijay Boyapati (@real_vijay) November 24, 2020
A bitcoin investor, Daniel Moravec of Bitcoin Mavericks, said that he believes the rise in price is spurred by threats of inflation in 2021.
“You can’t print more bitcoins once they are gone,” he told us. “Also I believe the current inflation rates of bitcoin is actually less than the current inflation rate of fiat currency.”
What does that mean in Main Street talk? The cypherpunks shorting the global economy. And will it keep going up? Probably for a little while, at least according to investors.
“Investors are positioning for a bull market continuation,” Vishal Shah, founder of derivatives exchange Alpha5, told CoinDesk. Shah saw options sales in the currency reaching an all time high, a factor that suggests that bigger players are ready to bet on BTC.
While there is some mainstream media coverage, the same flurry of general excitement that accompanied the 2017 rise is nowhere to be seen. Cryptocurrencies are fickle things and bull runs are rare and dangerous. The last bull run saw BTC fall over to about $US4,000 ($5,441) in November 2018, leaving many fans exhausted and out of cash. In many cases, you’d be better off buying and reselling a PS5 or new Xbox if you’re looking for an economic sure thing.
In the end, a quiet BTC rise might be best for everyone. Ben Munster, a former crypto journalist, told Gizmodo that he welcomed the silence: “Maybe this time bitcoin fans will make enough to stop tweeting. But I doubt it.”