Bitcoin (CRYPTO:BTC) continues to defy crypto sceptics, having notched up 4 weeks of consecutive gains.
The world’s biggest crypto by market cap is up just under 2% since this time yesterday, currently trading for US$47,525 (AU$65,102).
That brings Bitcoin’s gains to 10% over the past 7 days.
If that doesn’t sound overly impressive, let’s turn the calendar back a few more weeks.
As recently as 21 July, the digital token was trading for US$29,609. Meaning a price gain of 61% in just over 3 weeks.
Crypto assets again surpass US$2 trillion
It’s not just Bitcoin that’s rallying.
Ethereum (CRYPTO: ETH), the world’s second biggest crypto asset, has gained 12% over the past week. One Ether is currently worth US$3,278.
Enjoying an even bigger lift is Cardano (CRYTPO: ADA). Cardano has gained 51% over the past 7 days to US$2.13.
Cardano, according to CoinMarketCap,”is a proof-of-stake blockchain platform that says its goal is to allow ‘changemakers, innovators and visionaries’ to bring about positive global change”.
After the past week’s boost, Cardano now counts as the world’s 4th biggest crypto, with a market cap of US$68.4 billion.
Cardano is just 1 of the majority of cryptos following Bitcoin higher.
In fact, all but 1 of the top 100 cryptos gained over the past week. Celsius (CRYTPO: CELL) is the sole crypto in the red, down 1.7%.
The broad rally has seen the total cryptocurrency market cap again catapult past US$2 trillion.
What’s driving the Bitcoin rally?
In a note on Friday, Fundstrat strategists wrote (quoted by Bloomberg), “Bitcoin continues above its critical 200-day moving average. Also on our radar is Cardano (ADA), which after signaling smart contracts, are soon to hit the platform earlier this week is up.”
Indeed, depending on what time last Friday they penned that note, Cardano has gained another 20-30%.
On Saturday, NYDIG Global Head of Research Greg Cipolaro noted that the legislation passed by the United States Senate including increased legislative oversight of digital currencies failed to derail the recent rally. According to Cipolarao:
The price of Bitcoin was surprisingly resilient in the wake of the news. We interpreted this price action as extremely bullish… [W]e think the recognition of the crypto industry by lawmakers was ultimately a legitimising event, one that should give investors comfort that this industry is here to stay.
What’s next for the Bitcoin price?
Despite the strong rally, Bitcoin remains 27% below its record mid-April high of US$64,829.
But many experts believe that record may be destined to tumble.
David Donabedian is the chief investment officer of CIBC Private Wealth Management.
“The longer-term outlook is as divisive as ever, but in the short term, expectations are that the rally will continue. What’s driving it is momentum and money flows.”
Donabedian added a cautionary caveat, saying, “There is no credible way to value it.”
Some analysts, however, are pointing to the missing leverage in Bitcoin’s current rally as indicating it could have much further to run. All the way to US$100,000.
As Bloomberg noted, “The spread between Bitcoin futures and its spot price has shriveled relative to February… suggesting that demand for leveraged long positions remains muted.”
Ouellette, FRNT’s CEO said:
Typically we look at that as more of a strong-handed rally, which implies that the leverage portion of the rally comes later. If that is the case, those $100,000 targets are very reasonable, I’d suggest.
The last time we saw a move of this little leverage, we were pointing towards $20,000, and we didn’t really see the leverage come into the market in an aggressive way until we got to $40,000, which took us to $65,000.
Will the rally continue to US$100,000 or higher?
Perhaps.
But before you invest in Bitcoin or any other cryptos, it’s worth reviewing what Donabedian pointed out above.
Namely, “There is no credible way to value it.”
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