Traditional markets jumped last Monday following a fresh wave of positive newsflow around coronavirus vaccine developments, with both the FTSE 100 and Dow Jones Industrial Average jumping 1.6% on the announcement. Positive sentiment about the efficacy of these vaccines, touted at 95% for both the Pfizer (PFE) and Moderna (MRNA) treatments, continued throughout the week. 

Bitcoin (BITCOMP) also had a positive week, touching and surpassing the $18,000 level in multiple instances. 

Bitcoin attractive in both short and long term - Simon Peters, analyst, eToro

If you had said to me just a few weeks ago that we would soon be in touching distance of $20,000 – bitcoin’s all-time high – I may have voiced some doubts. Yet here we are, hovering around the $18,000 level, just $2,000 away from that legendary $20k mark. That’s a movement that could easily occur in just a few hours. 

Therefore, it is not out of the question that we could see a new all-time high before 2021. My bullishness hasn’t changed in terms of where I see bitcoin going in the long term, but I am conscious of momentum and would warn that the market does look a touch overbought right now. It is possible that at $20,000 we could see some investors take profits (or if they bought in 2017, cut losses and break even) and this could see the price of bitcoin enter a short period of consolidation. Given that the on-chain unrealised profit/loss data currently shows that the majority of bitcoin addresses are in profit, it’s not audacious to expect some selling at $20,000 or even slightly before. 

I highlighted in comments last week that ‘this time is different’ and I’m still of that opinion, which is why I see bitcoin as a good long-term investment opportunity. The institutional investment coming into crypto, not just from hedge funds, HNWI and family offices but from pension funds too, is a long-term tailwind that will continue irrespective of the short- to medium-term bitcoin price fluctuations.