- Bitcoin showed solid strength in breaking above $13,000 on Saturday
- The event was preceded by PayPal’s announcement that it will allow users to buy and sell cryptocurrency
- JPMorgan said Bitcoin is a risk asset with “considerable” potential upside
Bitcoin closed above $13,000 for the first time in almost three years, triggered by positive sentiment surrounding the benchmark cryptocurrency and news of large companies entering the space.
Bitcoin closed at $13,122 on Saturday after a brief descent to sub-$12,800 the previous day. On Sunday, it went as high as $13,357 before closing at $13,040.
It was on Jan. 15, 2018 when Bitcoin last closed above $13,000 — $13,607 at the time. It did go above $13,000 around June last year but did not close above it.
The ascent to $13,000 was preceded by news that PayPal will soon allow users to buy and sell cryptocurrency on its platform as well as Venmo. With 346 million users, analysts said PayPal will allow more users to get into Bitcoin. Upon publication of the news, Bitcoin plowed through $12,000, a key resistance, on Oct. 21 and closed at $12,802 on the back of significant volume.
JPMorgan’s global quantitative and derivatives strategy team also wrote to clients in a note published on Flows & Liquidity Friday that Bitcoin has proven itself to be a risk asset with “considerable” potential vs. gold.
According to Coindesk, there is strong growth in institutional interest in Bitcoin, which, coupled with millennial interest and legacy investor interest, is a step toward more corporate support for the cryptocurrency.
JPMorgan’s recent note is a stark contrast to its position on Bitcoin in 2017, with its CEO Jamie Dimon calling Bitcoin a “fraud” that would blow up soon.
“The currency isn’t going to work. You can’t have a business where people can invent a currency out of thin air,” he added.
In its Crypto Market Outlook in July, Bloomberg said $13,000 is the breakout price for Bitcoin, doubling down on what it said the previous month, which was that something terrible had to happen for Bitcoin’s price to not increase.
Speaking with Coindesk, Mike McGlone, Bloomberg Intelligence’s senior commodity strategist, said Bitcoin has turned $10,000 into a support level when it was revisited in September.
“Fundamental and technical indicators remain positive,” McGlone said when asked about what to expect of Bitcoin in the future.