The most popular cryptocurrency, Bitcoin just took another USD 1,000 leg up in the past 24 hours and now trades at around USD 8,000 on many exchanges, while only 12 coins out of the top 100 are in red now.
After jumping by almost 13% in the past 24 hours (05:59 UTC), Bitcoin price sits at a level last seen in July 2018, while Bitcoin dominance, or percentage of total market capitalization, increased to almost 59%. Total crypto market capitalization surpassed USD 240 billion.
At pixel time, Bitcoin is above USD 8,000 on Bitforex, OKex, Huobi, Coinbase Pro, Bitstamp and other exchanges. While crypto market data aggregators, such as Coinmarketcap, Coinpaprika, Coingecko show that the average price on exchanges ranges from USD 7,962 to USD 7,984
Other major coins are also registering strong gains today: Ethereum is up by more than 9%, XRP rallied 20% and other tokens among the top 10 are up 5%-12%.
"There are more than a dozen reasons why the crypto markets are surging lately, <...> but the ultimate reasons are nothing new and can be explained quite simply. Bitcoin has a strictly limited supply of 21 million coins that will ever be minted," Mati Greenspan, senior market analyst at the eToro trading platform, said, adding that each time we get a wave of demand, there simply aren't enough coins to go around, which pushes the price up at a rapid pace.
The analyst reminded that about 4 million of bitcoins have not yet been mined and another 4 million are estimated to be lost for good.
"So, the circulating supply at the moment is closer to 13 million coins. Of those, there are a lot of people who are simply not willing to sell at any price. So the liquidity of this market is incredibly thin," Greenspan explained.
He also stressed that bull runs aren't made in a single day and the market has been building up to this ever since the mid-December low. Moreover, the volumes have also been incredibly strong lately.
"As we know, bitcoin tends to go through some massive boom and bust cycles.<...> If the cycle repeats itself and we do see a 1,000% surge from the recent lows, that will bring the price up to USD 31,000. Given that crypto adoption is still in the very early stages, suddenly price predictions like USD 50,000 to USD 100,000 per coin don't seem so incredibly insane," the analyst said, stressing that this is still "an incredibly risky investment".
"There's even a fair chance that it will go from here straight to zero. Especially after a surge like we saw this weekend, I'd say that a minor retracement can probably even be expected," he added.