Bitcoin on track for its longest monthly winning streak since mid-2019

Demand for the cryptocurrency is 'relentless' as it hits an all-time high of $28,365 before paring back gains

Bitcoin has risen about 270 per cent so far this year and reached an all-time high of $28,365 at the weekend before paring some of the advance. Bloomberg

Bitcoin is on track for its longest monthly winning streak in more than a year after touching a record above $28,000 over the weekend.

The largest cryptocurrency reached an all-time high of $28,365 on Sunday before paring some of the advance, according to a composite of prices compiled by Bloomberg. The run of outsize returns over October, November and December so far is the longest such stretch since mid-2019.

“My sense is we’re very close to a top – we could hit $30,000 though,” said Vijay Ayyar, head of business development with crypto exchange Luno in Singapore. “We should definitely see a pullback, but the magnitude is probably lesser. We might only see 10 per cent to 15 per cent drops.”

Bitcoin climbed as much as 3.6 per cent on Monday and was trading at about $27,260 as of 9.25am in New York. The cryptocurrency has advanced about 270 per cent this year.

Bitcoin has divided opinion as its price more than tripled in 2020 amid a worsening pandemic. Believers see it as a hedge against dollar weakness and the risk of faster inflation amid huge stimulus injections, and cite growing interest from institutional buyers. Others question Bitcoin’s validity as an investment and point to the digital currency’s history of wild rallies followed by crashes.

Regulatory scrutiny of the still-nascent cryptocurrency industry continues to be a variable for investors to consider.

The Securities and Exchange Commission last week accused Ripple Labs and its top executives of misleading investors in affiliated token XRP. While Ripple plans to challenge the accusation in the courts, the development underscores the prospect of stricter oversight of digital assets.

Mr Ayyar said investors are shifting to Bitcoin and other digital coins in the wake of the XRP development.

Edward Moya, a senior market analyst at Oanda, says demand for Bitcoin is “relentless”.

“Bitcoin is still the trendy trade on Wall Street and that might not go away,” Mr Moya wrote in a note on Monday. “Volatility remains elevated, but for now seems like it will attract buyers on every major dip.”