(Bloomberg) — Bitcoin retreated Monday after scaling $61,000 for the first time on bets that some of the pandemic relief payments in the U.S. will end up chasing the digital token’s towering rally.
The largest cryptocurrency was trading at about $58,000 as of 7:40 a.m. in London, after topping out at $61,742 on Saturday. Bitcoin has climbed more than 1,000% in the past year, pushed higher by signs of increased institutional and corporate interest alongside the usual speculative demand.
Crypto has seen “some good flow, with traders front running U.S. stimulus checks,” Chris Weston, head of research at Pepperstone Group Ltd., wrote in a note, adding Bitcoin needs to stay above the previous high of just over $58,000 to bolster confidence in a “new bull leg.”
The lively debate over the scope for more stimulus-fueled gains, and whether it’s even possible to work out a long-term value for Bitcoin, continues apace. The token’s volatile climb from the depths of the pandemic-induced rout in markets last year far outstrips more traditional assets like stocks and gold.
Bitcoin-Gold Ratio Hits Record After Token’s 1,000% Jump: Chart
Jeffrey Halley, senior market analyst at Oanda Asia Pacific Pte, and Matt Maley of Miller Tabak + Co both see the potential for further gains based on some recent chart patterns. Bitcoin could rally toward $75,000 “very quickly,” Maley said. Bloomberg Intelligence strategist Mike McGlone has said $100,000 could be the next threshold.
The fortunes of a range of companies are increasingly tied to the cryptocurrency, from listed Bitcoin miners and brokers to firms that have invested in the token.
For instance, the correlation coefficient between Bitcoin and an equal-weighted basket of five stocks which have announced investments in the digital currency — Tesla Inc., MicroStrategy Inc., Square Inc., Meitu Inc. and Aker ASA — has surged to an average of 0.72 this year from 0.26 in 2020.
Crypto watchers are trying to gauge the outlook. Greg Waisman, the co-founder of the global payment network Mercuryo, said in emailed comments Sunday there is some recent “whale activity,” where coins from 2013 were being moved for the first time. Such events, he said, usually lead to selloffs.
(Updates markets in the second paragraph.)
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