Just a day after going past $20,000 price for the first time, bitcoin has hit another record high on strong interest from large investors. In today's trade, the price of the largest currency spiked 10.5% to $23,655, taking gains from the token to be over 220 percent so far this year. Bitcoin is being largely sought after on investors' perception of it rewarding with quick gains as well as its quality to serve as a hedge against inflation.
In contrast, ethereum i.e. a relatively smaller crypto unit which moves in tandem with bitcoin traded higher by 1.75%.
Meanwhile, on the Covid 19 vaccine optimism and lately on hopes of quick dole out of the US stimulus, stocks markets globally are at their record high and gold too has again moved to levels of Rs. 50,000 per 10 gm, but the gains from the digital asset are beyond comparison.
Also as bitcoin is available in limited supply with cap at 21 million, investors are viewing bitcoin as a hedge against inflation as central governments around the world are turning on their stimulus taps to fight the economic fall-out due to the 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."
While cryptocurrencies presence dates back to a decade ago period, it is only in last few years that it has gained more mainstream acceptance. Further, this year's huge traction in the digital token is also owed to increasing expectations of they being likely accepted as a mainstream payment method.
"Wider adoption will grow the value of bitcoin even more -- this is just the start," Li of digital foreign exchange platform Ziglu said.