Bitcoin Price Surges Past $16,000, Breaks 2020 Record For Spot Volumes

Bitcoin breached past $16,000 and surged to around $16,300 on the back of historic volumes on spot cryptocurrency exchanges. Analysts are expecting more room for the benchmark cryptocurrency’s price to increase.

Bitcoin closed Thursday at $16,310, its new 2020 high, and its highest in nearly three years. At this price point, Bitcoin is up 24% this month and 128% since the beginning of the year.

The strong rally to $16,200 is attributed to a surge in volumes on spot cryptocurrency exchanges. At this volume, it has beaten all previous records, similar to what the volume experienced during the March 2020 crash and the ascent to $10,000 last August.

Other indicators showed extreme bullishness since according to the Fear and Greed Index, the market is currently at 86, which means investors are extremely greedy, Cointelegraph reported.

Along with strong retail, institutional investors have also made up for the volume that Bitcoin experienced this November. This is evidenced by the volume on the Chicago Mercantile Exchange (CME), where institutions trade. Last week, open interest on the CME’s Bitcoin Futures surged to $934 million, a figure that has continued to increase since October.

Cointelegraph added that the size of the participants in large Bitcoin trading was also evidenced by reports from the Commodity Futures Trading Commission, which showed 102 large traders that have holding positions, with the minimum being 25 BTC. At today’s prices, that amount is worth $407,495.

According to Joseph Guagliardo, tech and blockchain lawyer at Troutman Pepper, the pandemic clearly had an impact on the narrative surrounding Bitcoin. "The pandemic has created a concern over U.S. inflation, making Bitcoin something of a digital gold and a safe haven," Guagliardo told Fox Business.

With news of companies like MicroStrategy and Square putting Bitcoin as part of their reserves, as well as PayPal accepting cryptocurrency, analysts expect increased participation from all audience types, institutional and retail investors alike.

"It’s a perfect storm situation. I can tell you that there are forces going on beyond the pandemic that are going on with cryptocurrency and technology," Guagliardo concluded.