Bitcoin Pushes $20,000 as Altcoins Lead Massive Crypto Rally
Due to the Thanksgiving holiday, we shortened our normal trading week to six days ending midday Wednesday. Regardless of the condensed timeframe, the crypto market erupted higher.
Bitcoin (BTC, Tech/Adoption Grade “A-”) crossed the $19,000 mark and continues to climb toward its all-time high near $20,000.
While Bitcoin continues to climb, it was overshadowed by the broader market. It was a phenomenal week for almost all cryptocurrencies, and the uptrend came largely without volatility.
The Weiss 50 Crypto Index (W50) soared 37.48%, as the entire sector melted up.
The Weiss 50 Ex-BTC Index (W50X) rose 71.75%, showing that altcoins were able to outpace Bitcoin and reduce its dominance over the crypto market.
Breaking down this week’s performance by market capitalization shows a reversal from last week; smaller and mid-sized cryptocurrencies gained ground on the large-caps.
The Weiss Large-Cap Crypto Index (WLC) gained 37.00% in a linear uptrend.
Despite greater volatility, mid-caps exploded. The Weiss Mid-Cap Crypto Index (WMC) climbed 56.25% higher.
The Weiss Small-Cap Crypto Index (WSC) rose 60.58% this week. Despite a slower start, the small-caps were able to outgain their larger and mid-sized counterparts by week’s end.
The crypto market saw massive gains this week. While Bitcoin continues its rapid ascent to all-time highs, the bigger story was the torrid rally from altcoins.
Bitcoin’s market dominance dropped to 63% from 67%, as we finally saw the altcoins follow Bitcoin’s lead. It was a good sign when Bitcoin led the way, and it could be an even better sign now that almost the entire market is charging forward.
Even as Bitcoin approaches its 2017 peak, the frenzy driving the market is greatly reduced. As we’ve noted, Google searches are an effective way of seeing the levels of “FOMO,” or fear of missing out.
Google tracks searches as a relative scale from zero to 100, and both “Bitcoin” and “Bitcoin Price” are fluctuating at around 20 out of 100. In 2017, both of these searches maxed out at 100.
Institutions continue to become more and more bullish on Bitcoin’s future. Rick Rieder, chief investment officer of mega-asset manager Blackrock, suggested cryptocurrencies could replace gold’s role because they are “so much more functional than passing a bar of gold around.”
Traditional equity markets and the crypto space too rejoiced after President-elect Joe Biden’s decision to appoint Janet Yellen as U.S. Treasury Secretary. Most notably, Janet Yellen kept interest rates low during her tenure as Federal Reserve Chair from 2014 to 2018.
Yellen, along with current Fed Chair Jerome Powell, is expected to continue a dovish/accommodative stance toward markets conducive to pumping asset prices. There are no other options, as global markets would collapse under the pressure of higher interest rates.
Of course, this is unsustainable over the long term, and prevailing monetary policy in particular makes the use case for Bitcoin all the more apparent. The excessive spending and printing of money cannot continue forever.
While President Donald Trump’s legal challenges appear to nearly be exhausted, a sustainable crypto rally is not dependent on Joe Biden or any other government official.
Last week, we saw more evidence towards confirming the next sustainable crypto bull run.
This week, we see signs it’s underway.
Best,
Juan
Weiss Ratings is the only financial rating agency that covers cryptocurrencies. Click here for more in-depth information about Weiss Crypto Ratings, including the Weiss Crypto Price Indexes and crypto-asset reviews.
