Bitcoin Hits All-Time High as 'Investment' Not 'Speculation'...

$19,510 During Trading, Surpassing December 2017 Record
Professional Institutional Investors Show Interest as Long-Term Investment Destination... Retail Investors Likely to Join
Breaking $20,000 Is a Matter of Time

[Asia Economy Reporter Jeong Hyunjin] Bitcoin has surpassed the all-time high record set in 2017. Unlike three years ago when it was perceived as a speculative asset, this time professional institutional investors are showing great interest for long-term investment purposes, making it likely that the $20,000 (approximately 22.13 million KRW) mark will be easily achieved.

On the 25th (local time), major foreign media outlets reported, citing financial information provider Refinitiv, that Bitcoin's price rose intraday to $19,510, surpassing the previous record of $19,458 set in December 2017. Although the highest Bitcoin price varies slightly across exchanges, this is the first time it has exceeded the previous record. This represents an approximately 400% surge since the sharp price drop caused by the COVID-19 pandemic in March, about a 160% increase compared to the beginning of this year, and a 75% rise over the past three months.

Besides Refinitiv, other exchanges such as CoinDesk and Bitcoin.com also show Bitcoin prices in the mid-$19,000 range, approaching an all-time high. Bitcoin prices have surged sharply on most exchanges recently due to the massive liquidity released amid the COVID-19 pandemic and growing expectations for cryptocurrencies, surpassing $19,000 for the first time in three years just the day before.

The current Bitcoin rally is attracting market and investor attention because it differs from the past. Analysts attribute the current bullish trend to increased interest from professional investors and assess that the atmosphere is different from 2017, when speculative investments were prevalent.

JP Morgan stated that funds are rapidly flowing into products operated by Grayscale Investments, the world's largest digital currency asset management firm, noting, "This situation shows that institutional investors viewing Bitcoin from a long-term investment perspective have played a bigger role than hedge funds in recent weeks." In fact, the assets under management by Grayscale exceeded $10 billion on the 18th. While the total invested assets from 2013 to 2019 were only $1.2 billion, $2.4 billion was added in the first to third quarters of this year, and the asset size, which was $5.9 billion at the end of September, surpassed $10 billion within two months.

As trustworthy investors flock in, capital inflows are expected to expand further. In particular, retail investors who have become interested in the Bitcoin rally are also expected to join. Bloomberg News reported, citing Google Trends, that searches for the cryptocurrency exchange 'Coinbase' have increased to the highest level in a year. Antony Frenshev, co-founder of Nexo, a platform that offers loans secured by cryptocurrencies, said, "FOMO (Fear of Missing Out) is gradually setting in," adding, "Small customers have started taking out loans to buy additional Bitcoin, and this will eventually push Bitcoin prices above $20,000."

However, skepticism about cryptocurrencies still remains among investors. Concerns exist due to Bitcoin's volatility being greater than that of gold, its biggest rival, and because it has yet to establish itself as a major means of transaction. Major large banks still conduct transactions using traditional currencies rather than cryptocurrencies. There are also ongoing worries that exchanges may struggle to properly handle sudden cash-outs of Bitcoin. Rich Rosenbloom, co-founder of cryptocurrency trading firm GSR, analyzed, "The fundamentals of Bitcoin have hardly changed, but the macro environment surrounding it has changed significantly," adding, "The recent uptrend indicates that market participants have begun to take the threat of a weak US dollar more seriously."