Just a day after crossing the milestone and psychological threshold of $ 20,000, Bitcoin is reaching new highs also due to the growing interest of large investors.
The world’s most significant cryptocurrency rose 10.5% to $ 23,655, up 220% this year. This growth is supported by demand from larger investors, which attracts the potential for rapid profits and the perceived characteristics of inflation hedging.
The minor cryptocurrency Ethereum, which often moves in tandem with Bitcoin, increased by 1.75%.
With Bitcoin supply limited to 21 million, investors see cryptocurrency hedging against the risk of inflation as governments and central banks turn 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 appeared more than a decade ago, but quickly began to be associated with crime, business flaws, hackers, and wild price fluctuations. Only in the last few years have they begun to attract a larger mainstream.
Bitcoin remains less regulated than most traditional assets, but institutional investors have begun to shed skepticism on cryptocurrencies as better market infrastructure makes the cryptocurrency market more accessible.
Growth this year has also been driven by growing expectations that cryptocurrencies will become a common payment method. PayPal also opens its platform to cryptocurrencies. Yet few people and businesses use Bitcoins for commercial transactions.
Yang Li of Ziglu’s digital foreign exchange platform said modern money apps are at the forefront of providing easy, secure and fast access to cryptocurrencies.
“Wider acceptance will increase the value of Bitcoin even more – this is just the beginning,” Li said.