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Is US election uncertainty powering bitcoin higher?
Bitcoin is in rally mode once more.
Whether it’s uncertainty from the U.S. election, the future of the pandemic or fear of missing out, the cryptocurrency is at the highest level since January 2018. Bitcoin jumped as much as 7% to $14,984 as of 9:46 a.m. in New York.
The digital currency has been benefiting from high-profile investments from the likes of Square Inc. and Paul Tudor Jones. JPMorgan Chase & Co.’s JPM Coin was reportedly used to make a payment for the first time. Proponents argue Bitcoin can be a diversifier in times of uncertainty, so events like lockdowns across Europe or delays of U.S. election results could be fueling its rise.
After taking out the June 2019 highs at $13,800, the next resistance is around $20,000, Fundstrat Global Advisors LLC technical strategist Rob Sluymer said in a note last month.
The cryptocurrency world is, of course, famously volatile. Bitcoin has made parabolic runs upward before, notably December 2017 and mid-2019, before major tumbles. And many strategists and investors are skeptical. Empire Financial Research’s Whitney Tilson said in an email Wednesday that he still regards cryptocurrencies as “a techno-libertarian pump-and-dump scheme” and recommends most investors avoid them.
Still, some see the cryptocurrency’s march higher as poised to continue.
“Previous Bitcoin resistance at about $10,000 may transition toward $20,000 in 2021,” said Mike McGlone, commodity strategist at Bloomberg Intelligence. “Certain supply leaves demand as the primary price metric, and most indicators remain positive.”
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