The world's largest cryptocurrency easily surpassed the $13,000 level Wednesday, rallying to its highest price since January 2018.
As of the Wednesday afternoon, bitcoin was trading at $13,747. This week alone, the crypto is up more than 40% and up 320% since December.
Accelerating gains have raised the stakes for traders as they try to gauge whether this month's rally has more staying power than the bubble that ended with a $700 billion crypto wipeout in 2018. While bulls have cheered signs of growing interest in virtual currencies from major companies like Facebook Inc. and JPMorgan Chase & Co., skeptics say it's unclear how those initiatives will ultimately benefit Bitcoin and its peers.
In the meantime bitcoin fans are rejoicing in the moves and saying it far outweighs the rally gold saw last week. The yellow metal had jumped over $40 to push above $1,400 - levels last seen, six years ago. The bitcoin versus gold as an asset class, has been a long-standing debate.
"Well bitcoin has a very small market-cap so it's not that hard to push around," Todd 'Bubba" Horwitz of bubbatrading.com said in an interview with Kitco News.
"I think what you are seeing is a major short-squeeze and a bunch of money being moved out of China."
On Wednesday, things were now cooling off on the the gold front. Some profit taking from the shorter-term futures traders and chart consolidation were seen after prices hit a six-year high of $1,442.90 in August futures on Tuesday. August gold futures were last down $1.10 an ounce at 1,417.60.
"It looked like the final blow-off for gold in the recent move. Not only did gold rally big and make over six-year highs but finished with the worst pattern of all -- a key reversal. It made new highs and closed on the low of the day," Horwitz said.
"The key reversal usually indicates a market is getting ready to turn, in this case lower. We are not hitting the panic button or suggesting that the rally is over and gold is going way down. This is a pattern we are happy with; it should help gold trade down to $1,380-$1,390, which is where we would like to add on," he said.
More on Bitcoin
- Bitcoin Has One Obvious Advantage Over Gold and It's Simpler Than You Think
- Bitcoin at $1 Million Is Not Out of the Question, Says James Altucher
- The Gold vs. Bitcoin Debate Is Only Getting Started and It's Getting Ugly
- You Can't Stop Bitcoin's Global Takeover, Says Max Keiser
This article is commentary by an independent contributor. At the time of publication, the author held TK positions in the stocks mentioned.