In the last two months, bitcoin has been moving up or down 2.4% a day on average and a handful of analysts believe that reaching $20,000 by a seasonally bullish period known as the Santa Claus rally is possible--and even likely.
Just last month, Bitcoin overpassed the $15,000 handle for the first time since January 2018 and now is on the path to reaching its record high of $20,000 in 2017.
The favorite of cryptocurrencies witnessed strong growth this year during the COVID-19 pandemic, with bitcoin prices gaining an smashing 170% since January.
The second-largest cryptocurrency by value, Ethereum has soared by 300%.
The Santa Claus rally for the market has been a thing for decades--so why not for bitcoin?
Since 1969, 34 out of 45 years have seen a late December rally, averaging a 1.4% gain.
Christmas 2019 wasn’t much of a celebration for bitcoin. It rallied, but was nothing compared to its previous rallies. This time last year, bitcoin was trading around $7,000.
Bitcoin has been bouncing around under $20,000 since early December 2020--but it just hasn’t been able to pass that benchmark.
Experts believe it is mostly psychological since there are sell orders very near the $20,000 level because some bitcoin owners are afraid of near-term sell-offs.
Still, one of the main boosters for the crypto has been massive support from Wall Street and some of the world's biggest investors--something it’s never had before, and something that makes this Christmas an entirely different narrative.
Demand for bitcoin has started to surge in November, with its advocates citing increased institutional investor interest for the digital asset.
Payment company Square is the latest big company that invested in cryptocurrency. In late October, the company said it bought 4,709 bitcoins, worth approximately $50 million, which represents about 1% of Square’s total assets.
In August and September, business analytics firm MicroStrategy announced that it had become the first Nasdaq-listed company to adopt bitcoin as a primary treasury reserve asset - using as much as $425 million of its cash pile to invest in bitcoin.
Last week, the company raised $650 million via bond sales to buy more bitcoin, bringing its holdings to over $1 billion.
Also, PayPal customers will be able cryptocurrencies to pay merchants as of early next year. Last month, the company secured the first conditional cryptocurrency license from the New York State Department of Financial Services, the first approved entity for a conditional Bitlicense in New York State.
"2020 is the year bitcoin went mainstream, and 2021 is the year everyone realizes that fact and plays catch-up," Cory Klippsten, the chief executive of U.S.-based bitcoin buying app Swan bitcoin told Forbes.
Other than that, the crypto market has been overtaken by rumors that the Trump administration is preparing new regulations before Donald Trump departs office in a huff.
In late November, the Coinbase CEO Brian Armstrong tweeted that the administration was planning new rules that would attempt to track owners of self-hosted cryptocurrency wallets with an onerous set of data-collection requirements.
However, considering bitcoin’s price increases this month, investors don’t seem overly concerned.