The world's highest-profile cryptocurrency jumped 10.5
percent to $23,655, taking its gains this year past 220 percent, 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 percent 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.
© Reuters
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