Market analysis： The worldˇs largest cryptocurrency is staging a comeback that has taken it up more than 50% from recent lows, reviving animal spirits and coaxing out sky-high price targets that, while a source of comedy for some, emerge when the asset is rallying.
Out are predictions the digital currency was ready to retest $20,000 amid a slew of negative headlines that many said would push it lower. Back in vogue are calls for the coin to keep rallying again to its all-time highs and beyond.
And there are plenty of superlatives to mark the moment: Bitcoin is up four weeks straight and is on pace for its second monthly advance. Overall, itˇs seen its fastest 21-day advance since February, the last time it was in the midst of vaulting toward records. Bitcoin was largely flat in Asian trading, holding at about $45,530 as of 10:36 a.m. in Hong Kong.
¨Itˇs roaring back,〃
Meltem Demirors, chief strategy officer at crypto fund provider CoinShares, said by phone. Despite new regulatory scrutiny, ¨many investors perceive this as positive news and a positive catalyst because itˇs clearing up a lot of the confusion or some of the uncertainty. And I think whatˇs being demonstrated as well is the crypto community is no longer some esoteric corner of finance.〃
The cryptocurrency is defying criticism over its toll on the environment and is advancing even as regulators around the world are promising tougher crackdowns. China, for one, has taken a number of steps to clamp down on crypto mining, among other things. In the U.S., policy makers are focusing on digital assets in a new way, with U.S. Securities and Exchange Commission Chair Gary Gensler last week calling the space the ¨Wild West.〃 He said he wouldnˇt compromise on protecting investors in setting out a regulatory framework.
Strategists are tossing those worries aside for now and are, instead, bringing out soaring price targets, which have long been a part of the investment thesis behind getting into cryptocurrencies.
¨Itˇs still got plenty of room to get the old high,〃
Bloomberg Intelligenceˇs Mike McGlone said in a television interview. ¨And guess what? If it just follows Ethereum, it goes to $100,000,〃 he said, referring to Bitcoin catching up, percentage-wise, to the second tokenˇs performance.
Fundstrat Global Advisorsˇ Tom Lee also sees it reaching $100,000 -- by the end of 2021. The firmˇs co-founder and head of research recommends investors follow a simple rule: If Bitcoin crosses above its average price over the last 200 days -- a long-term momentum measure -- then itˇs time to buy. The coin crossed that hurdle in recent days. ¨With Bitcoin crossing above its 200D, we think Bitcoin will rally strongly into,〃 year-end, Lee wrote in a note.
The rally comes despite potential new tax reporting requirements. A change to cryptocurrency reporting rules in Congressˇ infrastructure bill was blocked Monday, leaving language for broad oversight of virtual currencies in the legislation that was later passed in the Senate Tuesday.