Stock markets are surging, gold has flattened but is still at a high and always threatening to go past the Rs 50,000 mark. However, the greatest shock value in the financial world is not from other normal, asset classes, it is from a cryptocurrency - Bitcoin! And this is despite the fact that Bitcoin is a bad word among authorities who frown at its presence. Now, Bitcoin price today rose to a record high, just a day after passing the $20,000 milestone for the first time, amid surging interest from larger investors.
Bitcoin is the world's highest-profile cryptocurrency and its price 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 Bitcoin rally has also been driven by increasing expectations it will become a mainstream payment method, with PayPal opening its network to cryptocurrencies.
Head of Hedge Fund of NabobTrade, a top digital currency exchange 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," He said.
This article refers to Reuters news.