Bitcoin jumped to its highest level since December 2017 as the asset’s perceived value as a hedge against inflation and expectations of mainstream acceptance lured retail and institutional demand.
The most significant cryptocurrency concerning market capitalization climbed to $17,868, its greatest level since December the 20th, 2017, and was last up 6.1% at $17,760. It hit just shy of $20,000 in mid-December, 2017, throughout a purchasing frenzy driven by retail investors.
Bitcoin has climbed roughly 150% annually and rallied about 360% from the March lows.
“Driven by a mix of market structure and strong fundamentals, bitcoin could now be within days of reaching its all-time high,” Nicholas Pelecanos, head of trading in NEM, said.
“Underlying this bullish price action is the inflation hedge narrative that has captured Wall Street since the immense money printing campaigns undertaken by the Fed earlier this year,” he further added.
Citi’s technical analyst Tom Fitzpatrick said in a note that bitcoin could climb as high $318,000, dependent on his graphs.
Other major cryptocurrencies such as ethereum and XRP, that often go in tandem using bitcoin, climbed 4.2% to $479.91 and increased 4.5% to 30 US pennies, respectively.
Bitcoin’s 2020 rally has attracted momentum from powerful appetite for riskier assets after unprecedented authorities and central bank stimulation measures to combat impact of this COVID-19 pandemic, and its reputation for being inflation-proof.
Investors, for example household offices, which handle money on behalf of wealthy people, have sought out the cryptocurrency for a hedge against any potential inflation which may stem from central bank stimulus, analysts said.
Bitcoin’s distribution is capped at 21 million. Proponents state its lack supplies an intrinsic value and protects it from central bank or government policies that stoke inflation.
An expectancy mainstream business embrace bitcoin and its use as a way of payment will become more widespread also drove buying, analysts said.
Bitcoin has climbed by nearly half since PayPal said last month it might open its own network to bitcoin along with other cryptocurrencies.
In an interview with Bloomberg TV early this month, Rick Rieder, BlackRock Inc’s chief investment officer of global fixed income, stated crypto resources were a helpful addition to a balanced portfolio.
The team at Platform Executive hope you have enjoyed this news article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Tom Wilson in London and Gertrude Chavez-Dreyfuss in New York. Editing by Pravin Char and Barbara Lewis.
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