In this news, we discuss the Bitcoin climbs towards all-time high after topping $19,000.
LONDON (Reuters) – Bitcoin rose a mustache from its all-time high on Tuesday, after hitting $ 19,000 for the first time in nearly three years.
The world’s most popular cryptocurrency was last up 4.8% to $ 19,225, slightly below its all-time high of $ 19,666 reached in December 2017. Bitcoin has gained around 25% over the years. last two weeks only, and around 160% this year.
Demand for riskier assets has fueled its rally amid unprecedented stimulus packages to counter the blow of COVID-19; hunger for assets perceived as resistant to inflation; and the expectation that cryptocurrencies will be better accepted as a method of payment.
Bitcoin’s 12-year history has been peppered with dizzying gains and equally steep declines. Its markets and price discovery are very opaque compared to traditional assets such as stocks or bonds,
“My baseline scenario is that we will break the 2017 high and hold it above,” said Fawad Razaqzada, analyst at Think Markets. “But if you get immediate rejection above all time, that would raise the possibility of a correction.”
Smaller digital currencies such as ethereum and XRP – which often move in tandem with bitcoin – have taken a hiatus after advancing strongly in recent days.
Crypto markets have matured since Bitcoin’s peak in December 2017, attracting more large investors such as family offices and hedge funds.
Its gains in 2020 have prompted some investors to claim that the cryptocurrency could more than quintuple its price to $ 100,000 per year, drawing the eyes of skeptics who say it is a purely speculative asset.
Analysts say the limited supply of 21 million Bitcoin makes it a good hedge against inflation. Some investors believe the value of traditional currencies will decline as governments and central banks unleash massive stimulus packages to support economies affected by COVID-19.
Yet bitcoin’s gains continued even as gold – traditionally a hedge against inflation – slipped, with a resurgent pandemic making global growth and resuming inflation a more distant prospect.
Gold has lost 3.6% this month, up from 40% of Bitcoin’s gain.
Bullish investors cited expectations that bitcoin would be used en masse as a form of payment – which it has so far failed to do – as the reason for the divergence.
Large companies such as PayPal have embraced cryptocurrencies, raising hopes that bitcoin will become widely used and therefore more valuable.
“With BTC, we have also long been a global currency that is now not only an easily accessible store of value, but also a convenient payment mechanism,” said Michael Hall of Nickel Digital Asset Management, a crypto fund in London.
Chart: Bitcoin breaks $ 19,000 –
Reporting by Saikat Chatterjee; Additional reporting by Tom Wilson; Edited by Thyagaraju Adinarayan and Alex Richardson
Original © Thomson Reuters Corporation