This week in Bitcoin price: Jan 12-19

In another volatile week, Bitcoin’s price broke the $40,000 mark again, social media and press mentions spiked, and a survey of fund managers revealed bubble anxiety. All that and more in the latest edition of our weekly report. 

Published on January 19th, 2020

The big picture

After a week of major volatility, Bitcoin’s up-and-down path continued. Prices broke the $40,000 mark again on January 14 before settling in the $34,000 to $38,000 range. 

In the months Bitcoin’s bull run began in the fall, both press and social media attention lagged far behind the late-2017 crypto craze, but sustained high prices in recent weeks seem to have finally attracted mainstream notice. So what impact will that attention have on prices going forward? And can the market support much more growth after Bitcoin prices doubled in the last month?

Key points

In Bitcoin’s early years, most users were curious individual investors. As it began to catch on, niche venture capitalists entered the space. And in the last year, a wave of corporations and institutions have helped drive the current bull run. This week, a new potential class of institutional investor emerged, when Miami mayor Francis Suarez — seeking to attract tech firms and digital nomads — said that he was considering investing some of the city’s treasury into Bitcoin and allowing citizens to pay taxes and city fees in Bitcoin. In other news:

  • After making a £550m bet on Bitcoin earlier this month, U.K. fund manager Ruffer Investment elaborated on its reasoning: “We think we are relatively early to this, at the foothills of a long trend of institutional adoption and financialisation of bitcoin.

  • In an interview with The Block, crypto-focused asset management firm NYDIG explains why institutional investors’ interest in crypto remains largely confined to Bitcoin. Last month, NYDIG helped facilitate Mass Mutual’s $100 million Bitcoin purchase.

  • Reuters reports that a Bank of America survey of fund managers revealed their belief that “long bitcoin” has overtaken “long tech” as the most crowded investment category — meaning that it has an unusually high number of participants. Looking forward, however, the survey revealed some bubble anxiety: a “majority of respondents said [Bitcoin is] more likely to halve than double in value” in the next 12 months. 

  • A new vehicle called the Osprey Bitcoin Trust (OBTC) has emerged to allow investors “exposure to Bitcoin in a qualified IRA or brokerage account.” OBTC is the first potential competitor for the Grayscale Bitcoin Trust (GBTC), which has seen significant demand for its product amid increasing institutional interest.

  • Writer and investor Nic Carter broke down Bitcoin’s resurgence in a major essay for New York magazine. Primary factors he noted include increasing regulatory clarity, a growing group of Bitcoin evangelists inside corporations, and increasing anxiety around the modern monetary system.

Spotlight: media and social trends

After months of seeming mainstream disinterest in the wake of rising prices, total Twitter mentions of Bitcoin finally hit all-time highs this week according to The TIE. Are we seeing the beginning of a new wave in mainstream interest or have we reached the peak for this cycle?

Similarly, mainstream media mentions of Bitcoin have surpassed those for gold, even though gold has a market cap of more than $10 trillion compared to Bitcoin’s market cap of around $800 billion.