Bitcoin got off to a stormy New Year as investors continue to bet that the price of the digital currency will continue to rise.
Bitcoin’s price rose up to 19% over the weekend and was trading at $ 34,452 on Sunday, according to CoinDesk. It ended 2020 at $ 28,966, more than quadrupling from the year.
Bitcoin has been on an extended rally since early September, part of the “everything rally” that has fueled price gains, emerging markets and other assets.
In many ways, what happened in the first few days of 2021 was like a “short squeeze” on the stock markets, said AvaTrade analyst Naeem Aslam. He was referring to the buying cascade that can happen when investors react to a jump in price by buying back stocks that have been sold so as not to increase their losses.
It wasn’t just Bitcoin that went wild. The price of Ether, the second largest cryptocurrency, rose up to 35% over the three-day weekend and traded above $ 1,000 for the first time since early 2018. Ether was down 1% on Monday, closing at $ 998.