The world’s most valuable cryptocurrency Bitcoin surged to $20,000 level for the first time, as the demand from investors increased for the digital currency.
Bitcoin was traded at 5.6 percent higher to reach a price of around $20,600, according to market data provider Coin Metrics. The current value has taken the coin’s year-to-date gains to more than 180 percent, which started the year by trading at a value of $7,158.
Over the past few months, the cryptocurrency has soared in value as the payment networks like PayPal and Square have started using Bitcoin and more asset managers have taken an interest.
In August, the US-based multinational financial services company Fidelity Investments had started offering a Bitcoin index fund to wealthy investors and recently it had published a blog in which it had tried to clear out some of the most common criticisms against the asset.
“Bitcoin is a unique digital asset for an increasingly digital world that requires digging deeper than the surface level to understand its core properties and trade-offs. It pushes onlookers to question preconceived notions of what is right and widely accepted to begin to understand its full value proposition.”
However, investing in cryptocurrencies remains risky, with its highly fluctuating price. The monthly volatility of Bitcoin was up to 70 percent, shows the index compiled by cryptocurrency exchange Bitmex.
Bitcoin’s latest surge has reminded many market experts of its rally of 2017 to touch $20,000, which was followed by a sharp decline in the next year that witnessed its fall to nearly $3,000.
“Bitcoin bulls continue to derive strength from increased demand from large investors and rising expectations that it may become a mainstream payment method. A broadly weaker dollar has complemented the upside. As more investors potentially join the party amid Bitcoin’s limited supply, this could spell more upside for the cryptocurrency,” said Lukman Otunuga, a market analyst at brokerage FXTM.
Major Wall Street companies like S&P Global and Cboe Global Markets have been working to enter into crypto market data services. S&P Dow Jones Indices recently announced its plans to roll out crypto indices in 2021, while Cboe has partnered with New York-based trading software firm Coinroutes’, a crypto market data capabilities.