Bitcoin jumped to a record high against the dollar on Monday, as its 2020 rally steamed ahead, boosted by increased demand by both retail and institutional investors that watched the virtual currency as a safe-haven plus also a hedge against inflation.
The electronic unit touched an all-time high of 19,864.15, breaking its prior record set nearly 3 years back. It was last up at just a touch over 6% at $19,306.35.
Last Friday, however, bitcoin dropped more than 8%, under $17,000, before rebounding on Monday.
Bitcoin entire has gained more than 170% this year, fuelled by a requirement for riskier assets amid unprecedented fiscal and monetary stimulus, hunger for assets perceived as resistant to inflation, and expectations which cryptocurrencies would win mainstream acceptance.
“Bitcoin is a natural safe haven for those seeking shelter from rapidly increasing central bank money printing and the inflation that everyone agrees is already increasing,” said Sergey Nazarov, co-founder of Chainlink, a decentralized system that provides data to smart contracts on the blockchain.
Christopher Bendiksen, head of research at CoinShares, also cited continued corporate and institutional interest as well as post-Thanksgiving retail demand for bitcoin’s renewed surge.
“While circumstantial, price action really started picking up speed when the US woke up this morning, which could reflect buying pressure from retail-oriented platforms such as Square’s CashApp, Robinhood and PayPal,” he added.
Square’s Cash App and PayPal, which recently launched a crypto service to its more than 300 million consumers, have been scooping up all new bitcoins, hedge fund Pantera Capital stated in its letter to shareholders that a fee weeks ago. That has caused a bitcoin shortage, and it has driven the rally in the past couple of weeks.
Bitcoin’s 12-year history has been peppered with steep gains and both sharp drops. Compared to conventional assets, its economy is extremely opaque.
Analysts say the bitcoin marketplace has evolved since 2017, now boasting a functioning derivatives marketplace and custody services by leading financial firms.
The changes have made it easier for investors out of hedge funds to household offices to look for exposure to crypto, and consequently markets are, in general, more liquid and less volatile.
Bitcoin’s march to its former peak – attained after frenzied purchasing by international investors from Japan into the US – saw the cryptocurrency gain over 250% in just 35 days before losing 70% of its value in less than 2 weeks after its December 2017 high.
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 Thyagaraju Adinarayan and Nick Zieminski.
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