By Yasin Ebrahim
Investing.com – Bitcoin eased from near-record highs Tuesday, but signs of ongoing demand have raised hopes that the popular crypto will avoid the boom-and-bust fate seen in the rally several years ago.
Bitcoin fell 2% to $18,778 after hitting a high of $19,956, a level not seen since December 2017.
Bitcoin's end of year rally to $20,000 in 2017 was followed by a sharp U-turn that saw the crypto give back more than half of its value in just under two months.
But many have hit back at the idea of history repeating itself. Unlike the previous record run higher, this rally has the support of institutional investors who have already shown a desire to buy the dips.
"After a spike to $19.5k and dramatic reversal to $16k between November 25 and 26, the market consolidated for a few days and today resumed its bullish ascent to print a new high," said Seamus Donoghue, a vice president of sales and business development at METACO.
In a further sign of the strong institutional backing, Guggenheim Funds said Friday it would reserve about 10%, or about $500 million, of capital from its $5.3 billion Macro Opportunities Fund for indirect crypto investments.
Bitcoin's market capitalization, often used to gauge demand, has jumped to $356 billion, up from $329 billion last week, making up more than 60% of the total crypto market.
Outflows in bitcoin appeared to find their way into smaller-cap cryptos.
{997650|Ethereum}}, the second largest cryptocurrency by market cap, fell 0.97% to $592, Ripple XRP rose 0.41 % to $0.24, while LTC/USD rose 2.13% to $1.56.