Tyler Durden – Saturday, Mar 13, 2021 – 9:43
Back in mid-February, when Bitcoin (along with most high beta assets) tumbled by more than 25%, and fresh calls for the crypto’s imminent death re-emerged, we told readers to keep calm and BTFD (because after all bitcoin is nothing more than the inverse bet on continued central bank idiocy and that particular bubble will never burst), and referred readers to the Bitcoin Obituaries page which has documented no less than 403 instances when bitcoin was pronounced dead by the mainstream press.
Fast forward one month to today when not only has bitcoin survived its latest “near death” experience, but overnight it hit $60,000 for the first time amid renewed optimism that the digital token will achieve even wider adoption, the same thesis we laid out at the start of the year (long before Elon Musk announced that Tesla was buying $1.5BN of the crypto) when bitcoin was trading at $30,000 and we said it would go to $100,000 next. Bitcoin has doubled since – is now up more than 1,000% over the past year – and is well on its way to our target.
The cryptocurrency traded at 60,012 just after 7am ET, surging during the Asian session, and rebounding in almost record time from the February rout.
As our friends over at skewTrading show, the moment bitcoin crossed above the major resistance level at $60,000, a burst of trading erupted as a stop-loss cascade was triggered…
… liquidating $250 million worth of shorts in just a few short hours.
“Bitcoin’s resilience is proving to be the stuff of legend,” said Antoni Trenchev, managing partner and co-founder of Nexo in London, a crypto lender. “Every correction is an opportunity to reset and restart the move upwards.”
One reason cited for the breakout is that much of the $1.9 trillion in newly printed “stimmy checks” will quickly be allocated to cryptos.
“The announcement from the White House is very significant for risk assets in general, and crypto-assets specifically,” said Simon Peters, an analyst at eToro, adding that the “floodgates” are now open in terms of new liquidity.
As we first explained in late 2020, the reason why the current rally is so very different from the 2017 rally, is that unlike back then when the move was driven by retail trading, mostly in Asia, this time it is far more institutional-focused, and recent notable purchases include Tesla’s $1.5 billion investment in Bitcoin and Chief Executive Officer Elon Musk’s endorsements of the digital asset on social media. Repeating almost verbatim what we first said on January 9, one month later billionaire investor Mike Novogratz, who runs Galaxy Digital Holdings, said that Bitcoin could reach $100,000 by the end of the year.
And speaking of $100,000, the options-market assigns an 8% probability that bitcoin will trade there by the end of April and a whopping 20% by the end of the year.
Meanwhile, as much as bitcoin is hated by some fiat money supporters, none other than Goldman was recently forced to include it in its weekly recap of best and worst performing assets. Needless to say, it continues to simply blow away all of the competition.