KEY POINTS

  • Analysts say the current rally is fueled by the unrest at the U.S. Capitol
  • Bitcoin took 22 days to go from $20,000 to $37,000
  • JPMorgan earlier predicted further upside for Bitcoin

Bitcoin skyrocketed to $37,000 just a few hours after reaching $36,000 Wednesday amid protests by Trump supporters at the capitol.

Bitcoin closed Wednesday at $36,859, a new all-time high marked by institutional investor participation and incoming retail interest. While the new rally actually began at the lowest price point of $3,800 last March, Bitcoin reached a key inflection point when it overcame the previous psychological resistance of $20,000 on Dec. 16. 

From there, it took Bitcoin 18 days to reach $30,000 and just four days to go up to $35,000.

Bitcoin is considered a digital version of gold – scarce and a proven store of value during times of economic uncertainty. While the older generation prefers gold as a hedge against inflation, millennials prefer Bitcoin, JPMorgan said.

Analysts say Wednesday's price action was driven by the unrest caused at the Capitol by supporters of President Donald Trump who believe the election was rigged in favor of Joe Biden.

News outlet Coindesk said such macro events contributed to the attractiveness of Bitcoin. 

With Wednesday's price action, AssetDash listed Bitcoin as the eighth most valuable asset in the world, just behind Tencent and Tesla stocks. Bitcoin's market capitalization now stands at $690 billion, making it more valuable than Alibaba ($615 billion), Visa ($468 billion) and JP Morgan ($400 billion).

The entire cryptocurrency market's market capitalization is now more than $1 trillion.

JPMorgan, in a note to investors, said Bitcoin's current rally could even breach past $50,000 and $100,000. However, it warns that such a rally would be unsustainable because institutions will not add large amounts of Bitcoin to their portfolios. Until Bitcoin becomes less volatile, its institutional investments will not match that of gold. "A convergence in volatilities between bitcoin and gold is unlikely to happen quickly and is in our mind a multi-year process," the financial company added.

Bitcoin Bitcoin Photo: Pixabay