TOKYO (JAPAN) – Bitcoin cemented its position around $60,000 on Monday, as it got a breather from the weekend’s record high. Investors readied for inflation worries and US stimulus spending to take it even higher.
The world’s most popular cryptocurrency came down as low as $58,956.90 early in the Asian session, dropping from Saturday’s record high of $61,781.83.
The rally may have had an impact from a report that India would seek a ban on digital assets, casting a rain cloud for bitcoin post high-profile endorsements this year from the likes of Tesla’s Elon Musk, Twitter’s Jack Dorsey, and Goldman Sachs and BlackRock, considered investment giants.
Bitcoin has more than doubled in 2021, after witnessing a quadruple last year.
Masafumi Yamamoto, chief currency strategist at Mizuho Securities said, “Investment by institutional investors and corporates is increasing. It’s what I call the financialisation of bitcoin.”
“It’s becoming an asset that investors can no longer ignore.”
Bitcoin’s weekend surge was prompted after it saw an improvement in risk appetite in financial markets. President Joe Biden had signed his $1.9 trillion fiscal stimulus package into law and ordered a speeding up of vaccinations.
According to Justin d’Anethan, sales manager at digital asset company Diginex in Hong Kong, that momentum had seeped into thinner markets on the weekend, and technical factors intensified the move higher.
“The crypto market is derivatives heavy,” he noted.
“A small move up triggered many liquidations throughout Saturday and Sunday, thus becoming a not-so-small move.”
Seth Melamed, the Tokyo-based chief operating officer of cryptocurrency exchange Liquid, said legislation of the sort India is putting forth won’t hinder further gains for bitcoin.
“Because it’s decentralised, government bans or acceptance is somewhat irrelevant,” Melamed said. “Capital will find a way.”