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The
world's highest-profile cryptocurrency jumped 10.5% to $23,655,
taking its gains this year past 220%, buoyed by demand from
larger investors attracted to its potential for quick gains and
perceived inflation-hedging qualities.
Smaller coin ethereum, which often moves in tandem with bitcoin,
was trading 1.75% higher.
With bitcoin's supply capped at 21 million, investors see in the
cryptocurrency a hedge against the risk of inflation as
governments and central banks turn on the stimulus taps in
response to the COVID-19 pandemic.
"There will be a search for alternative currencies due to
constant fiat money debasement," Deutsche Bank analysts wrote in
a note. "It does feel that bitcoin will continue to be in high
demand."
Cryptocurrencies emerged over a decade ago but quickly became
associated with crime, trading glitches, hacks and wild price
swings. It is only in the past few years that they have started
attracting more mainstream interest.
Bitcoin remains less regulated than most traditional assets, but
institutional investors have begun to shed scepticism towards
cryptocurrencies as better market infrastructure make crypto
markets more accessible.
The 2020 rally has also been driven by increasing expectations
it will become a mainstream payment method, with PayPal opening
its network to cryptocurrencies.
Still, few people or businesses use bitcoin for commerce.
Yang Li of digital foreign exchange platform Ziglu said modern
personal money apps were at the forefront of ensuring easy, safe
and fast access to cryptocurrency.
"Wider adoption will grow the value of bitcoin even more -- this
is just the start," Li said.
(Reporting By Sinead Cruisel editing by Rachel Armstrong, Larry
King)
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