Mania for bitcoin drives it past US$19k for 1st time since 2017

Cryptocurrency bitcoin is up more than 40 per cent this month alone and has more than doubled this year.
Cryptocurrency bitcoin is up more than 40 per cent this month alone and has more than doubled this year. ST PHOTO: GAVIN FOO

NEW YORK • Celebrity endorsements, exchange outages, rafts of new trading accounts - bitcoin mania is back.

In a flashback to 2017, retail traders are piling into cryptocurrencies and driving prices back towards all-time highs. The number of first-time buyers is on course to eclipse that of December 2017, said Israeli-British firm eToro.

Bitcoin trades per day this month are 81 per cent greater than for the rest of this year combined. And Google searches for Coinbase, the crypto exchange, reached the highest level in at least a year, according to Google Trends.

"Nothing like a pre-Thanksgiving bitcoin run," said Binance.US chief executive Catherine Coley.

Bitcoin climbed within US$100 (S$134) of its all-time high after surpassing US$19,000for the first time since 2017.

It is now up more than 40 per cent this month alone and has more than doubled this year.

The frenzy spread to other crypto coins. Dash surged 28 per cent on Tuesday, and bitcoin cash jumped 15 per cent.

First-time buyers have been flooding online investing apps with orders. Providers of digital wallets and payment apps are also seeing a big jump in crypto sales.

Square, the San Francisco-based payments firm, said customers purchased US$1.6 billion worth of bitcoin using its Cash App in the third quarter, an 83 per cent jump from the prior period.

Even celebrities are jumping in. Actress Maisie Williams, who played Arya Stark on Game Of Thrones, bought bitcoin despite a snap poll she held on Twitter saying that she should not.

"Thank you for the advice. I bought some anyway," she tweeted.

Mr Antoni Trenchev, co-founder and managing partner of Nexo in London, which bills itself as the world's biggest crypto lender, said: "The fear of missing out is slowly kicking in. We are only just beginning to see some of our retail clients borrowing against their bitcoin to buy more bitcoin, and that will ultimately propel the rally well into the US$20,000s and beyond."

Trading in cryptocurrency XRP grew so intense overnight that Coinbase crashed, according to media reports. That sparked a plunge in the coin after the massive rally took it to a record.

Coinbase's official status page says its website is operational, and that an incident on Monday at 10pm has been resolved.

However, more seasoned market veterans remain wary. The crypto world is notoriously opaque, and unlike stocks or bonds, which are rooted in economic and business fundamentals, getting a read on what makes bitcoin tick can be impossible.

"Whenever I see mainstream media attention like this, that usually leads to a sell-off," said Mr Kevin Murcko, the founder and chief executive of CoinMetro, an Estonia-based crypto exchange.

"The big fish need to lay off risk, so they open the floodgates to bring in retail guys to dump on. Not sure this is the case this time around, but it seems a bit suspect."

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A version of this article appeared in the print edition of The Straits Times on November 26, 2020, with the headline 'Mania for bitcoin drives it past US$19k for 1st time since 2017'. Print Edition | Subscribe