Bitcoin casually breached $28,500 this morning, setting a new all-time high after breaking its previous $19,800 ATH level last month. The move came amidst new narratives spinning for the volatile asset, such as its further positioning as a “digital gold” and an American bank stating it was “too big to fail.”
— Su Zhu (@zhusu) December 30, 2020
As shown in the below chart, Bitcoin now sits at $27,800 at press time. The asset reached a high of $28,666 on crypto exchange Bybit in the wee hours, breaking a previous resistance level of $28,000. It trades above the 34-period exponential moving average, indicating a strong trend is still in play.
12/29/20 UPDATE: Net Assets Under Management, Holdings per Share, and Market Price per Share for our Investment Products.
— Grayscale (@Grayscale) December 29, 2020
GBTC trades over-the-counter in the US and is available in two forms: 1. Either as a subscription model with a lock-in period for investors, or 2. As an instrument that speculators can trade.The ETF holds a predetermined amount of Bitcoin per “share.” It trades at $30 at press time, with the value of the underlying BTC approximately $21 and the remaining a “premium” paid by institutional investors for the convenience it offers.But despite the high premium, investors have piled in. The GBTC sees average trading volumes of over $12-22 million daily, driven by both institutional purchases and arbitrageurs looking to pocket the premium.This has, in part, helped drive a contrast demand for spot Bitcoin, which in turn drives the asset’s prices up, which in turn drives demand up, which in turn drives purchases and prices up.The above is not a retail trading rumor, with even a major US bank acknowledging Grayscale’s role earlier in December 2020.JPMorgan acknowledges Bitcoin rushAs Bitcoin has moved, US bank JPMorgan, a Bitcoin-naysayer-turned-follower, seemingly doubled down on its ongoing bullish narrative for BTC. The bank said the asset was seeing increased inflows from institutional funds and investors and was primed for more upside.
— Mira Christanto (@asiahodl) December 30, 2020
In a client note earlier this month, JPMorgan said, “current valuation seems to be primarily driven by institutional demand, with Grayscale leading by volume.”However, the bank added in the same note:
“We remain cautious about how sustainable this is.”
But given the bank’s history of Bitcoin calls, traders might just oversee that statement.