Bitcoin breaches the $16,000 price level, bucking the sell-off in stocks
Bitcoin breached $16,000 early Thursday morning, soaring to its highest point since January 2018.
The largest digital currency by market capitalization was trading up 2.4% in the past 24 hours at $16,102 per coin at last check. The cryptocurrency was outperforming broader equity markets with the S&P500 and Dow Jones Industrial Average, as both traded slightly in the red. Financial media tied the dip to a dampening of enthusiasm over the market impact of a potential Covid-19 vaccine.
"The vaccine will be no quick fix," noted Invesco's Georgina Taylor.
This marks an interesting breakout for bitcoin, which for much of the pandemic has traded in lockstep with risk-on assets like stocks.
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It's not exactly clear what is driving bitcoin higher. Traders and investors tell The Block that recent price action could be tied to firms allocating to bitcoin as part of a treasury reserve strategy, following in the steps of MicroStrategy and Square.
"Price action substantiates that somewhat," said Thejas Nalval, co-founder of Parataxis, a crypto hedge fund. "Looks like consistent TWAP with every dip being bought with blocks."
"The public company treasury trade is real," explained Parataxis CEO Edward Chin. "Suspect we will see more announcements in February when 4Q'20 earnings come out as the volume really started picking up in October following the PayPal news."
