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This week in Bitcoin price: Nov 8-14

Bitcoin’s rally continues as price breaks $16,000 for the first time since January 2018. What’s driving the market? Get the info you need to make informed trades with our weekly dispatch from analysts and researchers at Coinbase.

Published on November 14, 2020

The big picture

In its fifth strong week in a row,  Bitcoin price climbed 4.17% – breaking the $16,000 barrier for the first time since January of 2018. Volume on Coinbase (see chart below) hit new yearly highs. While the day and night of the U.S. election didn’t bring major swings, a huge amount of volume entered the market as the results became more certain. 

Outside of the election, the biggest news driving markets this week was Pfizer’s announcement that its COVID-19 vaccine has shown promising results. Moderna is also expected to report results of its vaccine trial soon.

How much impact did the vaccine announcement have on the week’s prices? What other factors contributed to Bitcoin’s rally? All that and more in this week’s report.

Key trends

Cryptocurrency is experiencing a major boom. How major? The market cap of all digital assets is now up to $457 billion – a 7.5% increase over last week. Much of that is driven by Bitcoin. The biggest cryptocurrency saw its market cap break $300 billion — accounting for 64.38% of the entire crypto ecosystem — and is closing in on its all-time market cap high of around $330 billion. 

  • Coinbase saw record volumes once again as interest in both Bitcoin and Ethereum from new and existing clients continued to grow. We saw new and existing institutional buyers – as in hedge funds and similar investors – enter the market throughout the week

  • As Bitcoin crossed $15,000 for the second time and later $16,000, we saw an increase in crypto-native firms taking profits. This is expected as prices rise, but something we pay attention to because it could impact Bitcoin’s continued growth in the short term. (Or it might not – professional crypto watchers have a wide range of opinions about the likelihood of profit-taking slowing Bitcoin’s current growth.)

  • The Bitcoin price is often compared to gold’s, but Bitcoin showed much more resilience this week in the wake of the vaccine announcement. Immediately after the announcement, we saw a sell-off in gold – as well as treasuries, tech stocks and ‘stay-at-home’ stocks such as Peloton, Zoom, and Netflix. Bitcoin seemed immune to most of this news, correlating with neither equities nor gold.

  • Noteworthy blockchain activity for this week included a rising number of active addresses and transaction counts. Some of Wall Street’s biggest names have warmed to Bitcoin. Following legendary investment manager Bill Miller ‘strongly’ recommending it last week, hedge fund giant Stan Druckenmiller weighed in this week and revealed he now owns Bitcoin after ‘warm[ing] up to’ the cryptocurrency as a store of value and expecting it to ‘work better’ than gold.

  • We also saw increased interest in Ethereum ahead of ETH 2.0  – the planned upgrade of the Ethereum blockchain that is scheduled to begin later this year. Encouragingly, we’ve started to see some traditional financial institutions that have been buying Bitcoin consider Ethereum more seriously and begin trading it.

Bitcoin vs other assets

Wall Street saw another strong week, buoyed by the vaccine announcement – which drove gold down. Bitcoin didn’t seem to be particularly impacted by the news, continuing its upward journey. The divergence of bitcoin and gold prices, which have tended to be correlated, is noteworthy and something we’ll continue to watch. 

As of 4pm ET, 13 November 2020

Social trends

Unsurprisingly, Twitter mentions of both Bitcoin and Ethereum are on track to beat any other week this year. However, they both remain well below the number of tweets we saw during the last major rally in late 2017. This might indicate that the current rally is more limited to already interested crypto and finance participants, as opposed to curious new individual investors. 

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