Photo: Xinhua

Bitcoin is skyrocketing.

The leading cryptocurrency soared past $17,000 on Tuesday for the first time since its legendary 2017 rally, which saw it reach the dizzying height of $20,000 before slowly crashing down to about $3,400. At the time of publication (11 am Wednesday in Hong Kong), it was aggressively targeting the $18,000 price level but failing to punch through strong resistance at $17,750.

Crypto observers say that bitcoin’s dramatic ascent this year – it has risen 137% year-to-date – is attributable to a range of factors, including Covid-related government stimulus measures and Wall Street heavyweights such as Paul Tudor Jones and Stanley Druckenmiller trumpeting its virtues. 

Other factors boosting the crypto have been payment giant PayPal’s decision to sell cryptos and a growing recognition of its status as “digital gold” or “gold 2.0” and therefore a potential hedge against fiat currency devaluation, an expected consequence of emergency money printing to address the economic impact of the pandemic.

A leaked Citibank note to clients saying that bitcoin could hit $318,000 in 2021 could also be a factor contributing to the growing excitement among investors.

In an interview with CNBC, Charles Hayter, CEO of crypto market data provider CryptoCompare, sheds some light on the mainstreaming of crypto: “The gap between the crypto world and traditional financial institutions has closed dramatically. The result is that incumbent players are now fine to play in the digital asset markets. The narrative that is compelling them to do so is this alignment of Covid, monetary policy and political disarray globally.”

Bloomberg analyst Mike McGlone believes bitcoin’s trajectory could remain bullish for the foreseeable future. He tweeted, “$20,000 #Bitcoin Is Primary Hurdle Toward $1 Trillion Market Cap — The digital version of #gold but with more-limited supply and a history of adding zeros, appears to be in an early price-discovery stage and may simply continue its ascent in 2021. Mainstream adoption is rising..”

However, those thinking about investing in bitcoin now should probably consider waiting for a correction, said Ian Balina, the chief executive of Washington-based Token Metrics, which uses technical analysis of historical price data to make forecasts about the future price of cryptocurrencies.

He told Forbes, “Bitcoin is performing better than expected. While still bullish long-term due to macro-economic factors and large corporations getting into crypto, we expect bitcoin could correct back to around $14,000 by the first week of December.”

Read: Bitcoin could hit $318K in 2021: Citibank