As Bitcoin takes a breather and prices linger around $35K, the cryptocurrency market is staying in the global spotlight.

Last week, Twitter CEO Jack Dorsey championed Bitcoin in a tweet explaining Trump’s Twitter ban, shortly before institutional investment fund Grayscale reported a record day of fundraising, and the mayor of Miami moved one step closer to adding crypto to the city’s treasury.

Wall Street closes lower despite stimulus

• The DJ30, SPX500 and NASDAQ100 all closed lower on Friday and finished the week at overall losses.
• There is still a level of uncertainty in the markets, as investors wait to get a better understanding of life under Biden.
• On Thursday, the President-elect announced a $1.9 trillion stimulus package, which includes aid to the unemployed ($400 per person), to families ($1,400) and $350 billion in aid to states.
• Biden is also proposing to raise the federal minimum wage to $15 an hour.
• A reason for this having no effect on markets could be that this stimulus was already priced, with stock indices reaching all-time highs in anticipation of the aid package. …

As protestors stormed Capitol Hill last Wednesday, Bitcoin broke through $40K, pushing the total crypto market cap beyond the $1 trillion threshold.

The Democrat’s narrow victory over the senate fuelled the Bitcoin rocket further, creating expectations that a unified government legislature will pave the way for fiscal stimulus worth up to $3 trillion.

This pushed the crypto market rally into overdrive. Stellar doubled before finishing the week with 50% gains, XRP shrugged off the SEC lawsuit to rebound 17%, and Ethereum approached all-time highs before Bitcoin put an end to the fun by tumbling all the way back to $33K.

Wall Street climbs despite Washington chaos

• Unprecedented images were seen in Washington D.C. last week, as a group of Trump supporters stormed the Capitol Building.
• Although a brief dip occurred during the mayhem, this was overshadowed by the Democratic clean sweep in Senate elections, which is seen as a catalyst for more stimulus.
• On average, when the Democrats control the Presidency and both chambers, the S&P 500 returns around 9% on average over the course of the following year.
• Looking at the past year, The S&P’s 2020 reversal off the lows (-35%) has been the greatest ever, with a +16% return last year. …

While traditional markets were sleeping, Bitcoin welcomed the new year with a record-breaking rally. The leading crypto hit a series of fresh highs, tagging prices just below $35K on the twelfth anniversary of the first block mining.

The soaring prices appear to be driven by institutional buying. $1.2 billion worth of Bitcoin was discovered flowing out of Coinbase late last week, suggesting deep-pocketed traders have been buying for long-term investment.

It’s beginning to look a lot like Christmas in the crypto market, as traders are gifted with fresh Bitcoin all-time highs after a turbulent year.

The leading crypto smashed through the record of $20K on Wednesday, exactly three years since the last all-time high in 2017. Then it sprinted into uncharted territory to hit new records above $24K. Yet 2020 has seen Bitcoin jump more than 230%, more than any other asset class. Why did this happen, and what could we expect to see from Bitcoin in 2021?

New Covid-19 mutant has Europe on edge

• Markets this week may be impacted by a new Covid-19 strain, which has been discovered in the UK, and is apparently much more contagious than the strain currently known.
• However, the new mutant apparently causes the same symptoms and is most-likely not immune to the vaccines currently being deployed.

Bitcoin smashes all-time high

• The world’s largest cryptocurrency finally reached the $20,000 mark last week, but didn’t stop there.
• Over the weekend, Bitcoin reached as high as $24,000.
• Demand continues to outstrip supply as institutions continue to buy in. MassMutual, the Massachusetts insurance firm dipped its toes into Bitcoin with a $100 million purchase recently. …

Following a brief pullback to $17.5K, the dip was greedily eaten up over the weekend, pushing Bitcoin back towards all-time highs above $19K.

This resurgence was supported by big players from traditional finance, who are increasingly throwing their weight behind Bitcoin. Insurance fund MassMutual announced the purchase of $100m in the cryptocurrency last week, while Morgan Stanley’s Chief Strategist predicted that Bitcoin could replace the dollar as the world reserve currency, and the Standard Chartered bank CEO said the widespread rollout of digital currencies is “absolutely inevitable.”