A very good Tuesday morning for Bitcoin investors, as the coin hit $19,000 on Tuesday. The climb is the first major climb in nearly three years, homing in on its all-time high of just under $20,000.
According to the report by Reuters, the world’s most popular cryptocurrency was last up 3.2% at $18,958. Bitcoin has gained nearly 40% in November alone and is up around 160% this year, the report said.
Fueling its gains have been a demand for risk-on assets amid unprecedented fiscal and monetary stimulus, hunger for assets perceived as resistant to inflation, and expectations that cryptocurrencies would win mainstream acceptance.
Also, Reuters reported that Bitcoin investors, which include top hedge funds and money managers, are betting the virtual currency could more than quintuple to as high as $100,000 in a year by 2021.
It’s a wager that has drawn eye-rolls from sceptics who believe the volatile cryptocurrency is a speculative asset rather than a store of value like gold.
Since January, bitcoin has gained 160%, bolstered by strong institutional demand as well as scarcity as payment companies such as Square and Paypal buy it on behalf of customers.
Bitcoin is within sight of its all-time peak of just under $20,000 hit in December 2017. It debuted in 2011 at zero and was last trading at $18,415.
Going from $18,000 to $100,000 in one year is not a stretch, Brian Estes, chief investment officer at hedge fund Off the Chain Capital, said.
“I have seen bitcoin go up 10X, 20X, 30X in a year. So going up 5X is not a big deal.”
Estes predicts bitcoin could hit between $100,000 and $288,000 by end-2021, based on a model that utilizes the stock-to-flow ratio measuring the scarcity of commodities like gold. That model, he said, has a 94% correlation with the price of bitcoin.