In today's market, when the Bitcoin price dips, the rest of the cryptocurrencies tend to follow suit. Photo: iStock
The lowest yuan/dollar daily reference rate in more than a decade seems to have sent traders flocking to Bitcoin. Photo: iStock

Digital asset markets have been flying high recently but there has really only been one in the driving seat. Bitcoin has been hitting new highs for the year all week, on a path so steep that many are now asking if it will soon be back to its $20,000 peak of late 2017.

The unchallenged king of crypto reached the giddy height of just under $13,000 during Asian trading this Wednesday, a move that lifted the digital coin a whopping 14% on the day. Total trade volume for the asset also topped $30 billion per day as its market capitalization reached an 18-month high of $225 billion.

There seems to be no stopping Bitcoin at the moment as it eats into the rest of the crypto assets, leaving them in the digital dust. The stats speak for themselves; over the past seven days Bitcoin has gained 38%, and since the beginning of the month it is up 50%. If that sounds impressive the 240% Bitcoin has made since the beginning of the year blows away pretty much every other traditional investment asset in terms of performance.

The big move has lifted total crypto asset market capitalization to $360 billion, its highest level of the year. Bitcoin, however, now commands around 65% of this market leaving other crypto tokens such as Ethereum and Ripple floundering.

Fundamentally, Bitcoin momentum is likely to have been driven by escalating political and economic tensions across the globe. Increasing US sanctions, Trump-inspired trade wars, and a plummeting US dollar has poured additional fuel on the fire of digital assets which are increasingly being viewed as safe-haven offshore stores of wealth. As a testament to those economic woes, gold has also been on a tear recently, reaching its highest value for six years.

Facebook’s foray into the crypto space may have also benefitted Bitcoin. A digital currency controlled by one billionaire and a conglomerate of US tech monopolies has raised a lot of questions, but it has also boosted awareness of real decentralized digital assets and the Bitcoin FOMO – fear of missing out – has clearly intensified this month.

As is now the norm, many mainstream economists, led by Nouriel Roubini and Peter Schiff, have been issuing strong warnings about bubbles, once again, while the crypto evangelists, point to their much loved logarithmic Bitcoin charts to argue that these market cycles are becoming greater in magnitude than the previous one. 

That means once again many from the mainstream are trying to work out if and when Bitcoin will climb beyond its all-time high of $20,000 again. When it last got close to that number, in December 2017, it then plunged below $6,000 by February.

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