Bitcoin reached the $400 USD mark again over the weekend, extending gains that started on the first few days of December. Although it is still early to talk about a Santa effect, it now seems plausible that Bitcoin will end the year in or around that mark. Even if it misses the mark and goes back down to the $300 level, it would still be a much better gift for savvy investors this year than other commodities and currencies. But holding on for too long, expecting Santa to deliver a juicier profit, might prove to be a risky move.
Bitcoin started the year at around $200 USD. It still faced a lot of skepticism related to past volatility. As the year went by, and the recovery of oil shattered along with the Greek default panic and disappointing numbers from China, it seems that Bitcoin looked a lot better in relative terms at least. Furthermore, there is no denying the power of a currency that is not issued or controlled by governments. It became the safe haven of all those who saw their capital at risk and didn’t have any other alternative. The chart below shows how Bitcoin sheltered investors this year.
As the Grexit fears gripped investors, Bitcoin’s value rose. The same happened in October’s as China disappointed. Chart courtesy of bitcoincharts.com
All the hype still leaves a question mark hanging over Bitcoin’s performance. January has been a disappointing month for the currency for the past 2 years. This means that investors will probably have to cash in on their Christmas gift pretty soon, before the hang over from the Christmas party sets in. After all if an investor bought in at around $200 USD, it would be safe to call the peak of the ‘Santa Claus Rally’ on Bitcoin and maybe get into another rally before the last week of December sets in and there are no more assets giving out Christmas gifts.
