The public’s opinions on bitcoin are all over the place. Many people don’t consider it a worthwhile investment, whereas others swear by it.
During late 2019 and early 2020, bitcoin is proving its value once again. Not only does it make banks’ deposit rates look amateurish, but it also blows the stock markets out of the water, once again.
The Bitcoin Rally Resumes
It is crucial for any financial market to keep traders on their toes. In the cryptocurrency industry, this is a requirement more often than not. Volatile markets can easily turn around on a dime. Protecting against potential losses is crucial to maintain a healthy portfolio.
It is evident that the current crypto market momentum remains bullish. All of the top markets have noted strong gains in recent days. Even the likes of BSV, Basic Attention Token, Dash, and others are all moving up swiftly.
Most of the focus lies with the bitcoin price, for obvious reasons. The world’s leading cryptocurrency provides the strongest returns on investment right now. January is off to a good start, especially after troublesome periods in 2018 and 2019. The question now becomes how long the momentum will last for.
One interesting indicator is the bitcoin futures price. CME Group has noted a near 98% increase in value throughout 2019. It is a telltale sign of a market going through a strong recovery phase. Even in early 2020, futures prices on CME’s platform are up by over 20%.
Stock Markets Grow Slower
Compared to bitcoin’s meteoric price increase, all other markets look bleak. This is despite the stock market trying to mount a comeback in 2019. The S&P 500 Index gained 29%, whereas the Dow Jones went up by 22.3%. Both of these markets note very minimal gains in the new decade so far.
One notable exception is the NASDAQ Composite Index. It successfully outperformed both competitors by quite a margin. Throughout 2019, the COMP gained just over 35%. In January 2020, the trend continues, with a 3.3% gain overall. Still, those figures are bleak compared to bitcoin and other cryptocurrencies.
Can it be Sustained?
It usually doesn’t take long for financial experts to weigh in on cryptocurrency price trends. Lamoureux & Co President Yves Lamoureux is bullish on bitcoin. He considers the asset’s intrinsic value to be near $11,000. Additionally, a year-end target of $16,000 is very plausible, in his opinion.
There is also the upcoming block reward halving. On social media, the debate is whether the halving is priced in already. Most people lean toward this not being the case just yet. Others expect the value per BTC to plummet once the halving goes in effect.
Furthermore, there will be more derivative products tied to cryptocurrency this year. CME bitcoin futures options have gone live a few days ago. This creates new opportunities for traders who want exposure to additional risk and reward. It is unclear if other providers will introduce new vehicles as more time progresses.