Bitcoin breached the $20,000 level for the first time in history on Wednesday, as crypto enthusiasts pointed to increased demand from institutional investors for the red-hot digital currency.
The world’s most-valuable virtual currency traded 5.6 per cent higher to a price of around $20,600, according to market data from Coin Metrics, taking its year-to-date gains to more than 180 per cent, buoyed by demand from larger investors attracted to its potential for quick gains, purported resistance to inflation and expectations it will become a mainstream payment method.
Bitcoin’s latest record high has reminded many market watchers of its monster rally to nearly $20,000 in 2017. That was followed by a sharp pullback the following year that saw it fall close to $3,000.
Bitcoin’s blistering rally has seen a massive flow of coin to North America from East Asia, fuelled by the hunger for bitcoin among bigger and compliance-wary US investors.
The rally in bitcoin, which some investors have seen as a potential safe-haven, has coincided with spot gold’s drop in recent months.
Some investors such as hedge funds and family offices have in the past been deterred by the opaque nature of the crypto market. Tightening oversight of the American crypto industry has helped soothe some of those concerns.