Bitcoin Prices Reach Highest Since Early January As Adoption Bolsters Sentiment

Bitcoin prices rallied today, rising to their loftiest value in more than a month as the latest signs of institutional adoption helped strengthen the optimism of market participants.

The world’s most prominent digital currency reached $44,508 around 2:30 p.m. EST, CoinDesk data shows.

At this point, the cryptocurrency was trading at its highest since January 5, additional CoinDesk figures reveal.

Further, the digital asset was up more than 30% from the recent low of roughly $33,000 it hit late last month.

[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]

Institutional Adoption

When explaining these latest price movements, multiple analysts pointed to recent signs that organizations are embracing bitcoin.

Earlier today, KPMG Canada, the Toronto-based branch of professional services firm KPMG, announced that it had purchased some bitcoin, as well as its digital sibling ether, CoinDesk reported.

Further, automaker Tesla Inc. revealed in a recently filed 10-K that it held almost $2 billion in bitcoin at the end of last year.

“Tesla’s 10K SEC filing update was released yesterday, reaffirming notions that Tesla held onto their BTC holdings amidst declines in Bitcoin’s price to the lower 30 thousands,” said John Iadeluca, founder & CEO of multi-strategy fund Banz Capital.

“Combined with the news of KPMG Canada adding Bitcoin onto its balance sheet, encouraged a sharp rise in positive Bitcoin price sentiment,” he stated.

Joe DiPasquale, CEO of cryptocurrency hedge fund manager BitBull Capital, offered similar input.

“The bounce from low 30 thousands gave the market confidence and we saw sentiment improving over the last few days,” he noted.

“Today news of Tesla maintaining its BTC holdings and KPMG Canada adding BTC to its balance sheet have also bolstered sentiment,” emphasized DiPasquale.

Josh Olszewicz, head of research at Valkyrie Investments, also spoke to these developments, noting how they are simply the latest sign of progress for cryptocurrencies.

“KPMG Canada, a big four accounting firm, announced today they will be holding BTC and ETH in their corporate treasury. The new allocation represents a growing list of significant institutional adoption and maturation of an emerging asset class.”

Lawmakers Embrace Bitcoin

Andrew Rossow, an internet and technology attorney, also spoke to adoption, but took a different angle, focusing on the actions of U.S. government officials.

“From a legal perspective, I believe a huge source of credit comes from Congress, with many members of the U.S. Senate speaking favorably on Bitcoin,” he stated.

“On Friday, Texas Sen. Ted Cruz disclosed that he invested in $50K worth of bitcoin during its dip back in Jan., which lended additional favor to Texas’s journey towards becoming a notable bitcoin mining hub,” said Rossow.

“This cannot be overlooked, regardless of your political affiliations.”

Market Dynamics

In an effort to shed further light on current market conditions, as well as provide some clarity on what might come next, Olszewicz highlighted some important key factors.

“Crypto derivative funding rates still lean negative, even with rising price and open interest, suggestive of on-going short interest,” he stated.

“Price may continue upward momentum so long as shorts continue to get squeezed and are forced to cover positions or become liquidated.”

Further, he spoke to the relationship between the price movements of digital currencies and the values of major indices like the S&P 500.

“Crypto also continued to decouple from traditional finance indices, such as the S&P 500 and Nasdaq, throughout the day,” said Olszewicz.

“Strong correlations between crypto and these indices held through the month of January, but began to break after the non-farm payroll numbers were released on Friday. A decorrelation between the two sectors could be suggestive of returning risk-on sentiment in Crypto.”

Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, EOS and sol.