Bitcoin reached a 15-month high this week, swiftly moving past $13,000 and now pushing up against $14,000 for the first time since January 2018, according to data compiled by CoinMarketCap.
While the broad crypto market is performing well this year, bitcoin stands out as the top performer. The first and still most popular digital currency has multiple winds at its back, including institutional interest in the currency, signs of burgeoning usability at retailers, a forthcoming blockchain reward halving and Facebook’s (FB – Get Report) recent announcement about its own cryptocurrency.
Taken together, these factors are creating an indelibly positive sentiment about bitcoin’s value.
The currency responded particularly well to Facebook’s introduction of Libra, its cryptocurrency that targets the unbanked by striving to provide them with a fast and affordable way to execute transactions in the digital age. Libra won’t compete directly with bitcoin, but it will bring Facebook’s 2.5 billion users in direct contact with cryptocurrencies, which could create more demand for bitcoin.
However, despite the overwhelmingly positive sentiment surrounding bitcoin, it could soon retreat from its latest highs.
In an interesting split, hedge funds and big institutional investors are betting against bitcoin while individual investors are significantly more bullish.
According to the most recent Commodity Futures Trading Commission report by CME, the largest U.S. exchange offering bitcoin futures contracts, money managers are 14% more bearish in their positions, and some investor classes are three times more likely to short bitcoin than to take a long position.
Of course, this data doesn’t come without a caveat. Most notably, the report was issued on June 21st when Bitcoin was trading around $9,000, significantly lower than its current price.
“Traditional market participants may be more skeptical of [bitcoin] than millennial day traders,” explains George Michalopoulos, a portfolio…