The value of Bitcoin broke another record

3 months ago

Bitcoin jumped more than 5% on Friday, December 8, to new record highs. It is now trading at $41,530, making up for losses incurred earlier in the session.

The world’s most popular digital currency fell to $36,618.36 on the Bitstamp exchange before recovering. Competitive cryptocurrency Ethereum rose 3% after falling more than 10%.

Bitcoin is up nearly 1,000% from its low in March. It surpassed $30,000 for the first time on Jan. 2 after hitting the $20,000 mark on Dec. 16.
Some market participants warned of a correction after reaching the $40,000 milestone, but bitcoin was poised to register its 11th growth session of the last 12.

Increased demand from institutional, corporate and, more recently, retail investors drove bitcoin growth, attracted by the prospect of rapid growth in a world of ultra-low yields and negative interest rates.

“We are seeing a continued surge in demand, driven largely by sustained and unprecedented institutional interest that will not diminish as we approach 2021,” said Frank Spiteri of CoinShares, a digital asset manager.

Strategists at JPMorgan wrote Jan. 5 that the digital currency has become a competitor to gold and could trade as high as $146,000 if it becomes a safe haven asset.

Interest in the world’s largest cryptocurrency has surged in the past year, with investors viewing bitcoin as a hedge against inflation and an alternative to the depreciating dollar.

Bank of America investment strategists said Friday that “violent” inflationary price action in the markets has contributed to the bitcoin rally in the past two months.

But the bank warned that cryptocurrency is “deflating previous bubbles,” such as the dot-com bubble of the late 1990s, China in the 2000s and gold in the 1970s.

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