According to the Reuters report, the leading cryptocurrency bitcoin was changing hands at $33,365 in Asia on Monday, after soaring to a record high of $34,800 on Sunday as investors continue to bet the digital currency is on its way to becoming a mainstream asset. The latest milestone came less than three weeks after bitcoin price crossed $20,000 for the first time, on Dec. 16, and it has now surged some 800% since mid-March.
Bitcoin continues to strengthen its place as a safe heaven.
With its limited supply of 21 million, some see bitcoin as a hedge against the risk of inflation as governments and central banks turn on the stimulus taps in response to the ongoing global pandemic. The largest cryptocurrency has established its image as a safe-haven play during the COVID-19 pandemic, akin to gold. “Some of it is reflecting the fear of a weaker dollar,” Bank of Singapore currency analyst Moh Siong Sim said of the most recent rally. “It seems like people prefer bitcoin as an expression of concern over currency debasement, relative to gold,” the bank added.
Institutional interest continues to push bitcoin.
There are said to be many factors that played a part in the recent upward rally of bitcoin price. At the time of writing, bitcoin’s price is trading at just above the $32,000 mark. The main reason for this gigantic rally of bitcoin is the growing institutional interest in bitcoin. Bitcoin’s advance also reflects increasing expectations of it becoming a mainstream payment method, with PayPal opening its network to cryptocurrencies. Dave Chapman, Executive Director at Hong Kong-based digital asset company BC Group, said that institutional investors see the potential for greater risk-adjusted returns compared to traditional investments.