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After surging about 20% this week, Bitcoin breached the $22,000 mark for the first time. Experts believe that more gains lie ahead for the world’s largest cryptocurrency.

Bitcoin jumped as much as 4.6% to about $22,173 on Thursday, before paring some of the advance. The rally in the digital coin is polarizing opinion, given Bitcoin’s history of boom and bust. Proponents argue the cryptocurrency is muscling in on gold as a portfolio diversifier amid dollar weakness and potential inflationary pressure. Others see speculative fervor that will inevitably lead to a bust akin to the meltdown three years ago after a furious Bitcoin rally.

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Yet there are signs that longer term investors like asset managers and family offices are playing more of a role this time around, alongside trend-following quant funds. Bitcoin’s scarcity combined with “rampant money printing" by the Federal Reserve means the digital token should eventually climb to about $400,000, Scott Minerd, the chief investment officer at Guggenheim, said on Bloomberg TV on Wednesday.

Here’s what people in markets are saying about Bitcoin’s move:

Parabolic Price

The “price will now go from linear to parabolic" in part because retail investors have so far largely been “out of this rally," said Kay Van-Petersen, global macro strategist at Saxo Capital Markets Pte in Singapore.

Fed Kick

“The move above $20,000 has been coming and I’m probably a little surprised it didn’t come sooner," said Craig Erlam, senior market analyst at Oanda Europe Ltd. “Fed stimulus may have given it an extra kick but, let’s face it, Bitcoin doesn’t need it. A break above $20,000 may bring the buzz and a strong end to the year."

Bitcoin and Gold

“The lowest-ever Bitcoin annual volatility measure versus gold and the stock market near the end of 2020 may sustain the crypto’s performance advantage in 2021," said Bloomberg Intelligence strategist Mike McGlone in a report. He sees the price ratio of Bitcoin-to-gold headed for 100, if history is repeated, from its current level of around 12.

Watching Resistance

If Bitcoin sustains its momentum, then “testing $36,000 will be the next real objective," said Dan Gunsberg, CEO of Hxro, a crypto trading platform. But he indicated that a significant break below $13,800 would herald a much weaker period.

With inputs from Bloomberg

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