Bitcoin’s 2020 race has been accelerated as the coin surged to a record high value against the dollar last day, boosted by higher demand from both institutional and retail investors.
Last day, the digital coin posted an all-time high value of $19,864.15, transcending its 2017 record of $19,306.35. Even though bitcoin witnessed an 8 percent fall last Friday taking it below $17,000, this year the crypto made an overall gain of more than 170 percent.
Experts suggest that the increased demand for riskier assets due to the unexpected fiscal and monetary stimulus, hunger for assets that are recognized as resistant to inflation and hope that cryptocurrencies will get wide acceptance are some of the key factors for this surge of the digital coin.
“Bitcoin is a natural safe haven for those seeking shelter from rapidly increasing central bank money printing and the inflation that everyone agrees is already increasing,” said Sergey Nazarov, co-founder of Chainlink, a decentralized network that provides data to smart contracts on the blockchain.
With the current surge in value, smaller coins ethereum and XRP, which often moves back-to-back with the bitcoin, have gained 5.6 percent and 6.6 percent respectively.
According to the head of research at CoinShares, Mr. Christopher Bendiksen, the constant corporate and institutional interest and the post-Thanksgiving retail demand has paved the path for the current surge in bitcoin’s value.
“While circumstantial, price action really started picking up speed when the U.S. woke up this morning, which could reflect buying pressure from retail-oriented platforms such as Square’s CashApp, Robinhood and PayPal,” Mr. Bendiksen added.
Recently the online payment applications Square’s Cash App and PayPal, have launched its crypto service to over 300 million users which are sweeping up all-new bitcoins, investment firm Pantera Capital said in its letter to investors a few weeks ago. This created a shortage for the digital coin and has driven the rally in the last few weeks.
Since its initiation in 2009, bitcoin has confronted steep gains as well as sharp drops and experts suggest that its market is not at all transparent when compared to traditional markets.
According to analysts the market of the digital coin has evolved since 2017. The change has increased the exposure of professional investors from hedge funds to family offices’ to crypto, which resulted in a more liquid and less volatile market condition.
In 2017, bitcoin’s surge to its prior record began with frenzied buying by retail investors from Japan to the United States which gained over 250 percent in just 35 days and later losing 70 percent of its value in less than two months after December in that year.