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Bitcoin rose to a record high on Thursday, just one day after breaking the $ 20,000 milestone (roughly Rs. 14.7 lakhs) for the first time, amid growing interest from larger investors.
The world’s highest-profile cryptocurrency jumped 10.5 percent to $ 23,655 (roughly Rs 17.4 lakhs), pushing its gains this year above 220 percent, driven by demand from attracted larger investors for its quick profit potential and perceived inflation hedging qualities.
Ethereum, a smaller currency, which often moves alongside Bitcoin, was trading 1.75 percent higher.
With Bitcoin’s supply limited to 21 million, investors see the cryptocurrency as a hedge against inflation risk as governments and central banks turn on stimulus taps in response to the COVID-19 pandemic.
“There will be a search for alternative currencies due to the constant degradation of fiat money,” Deutsche Bank analysts wrote in a note. “He feels that Bitcoin will continue to be in high demand.”
Cryptocurrencies emerged more than a decade ago, but they quickly became associated with crime, business failures, hacks, and sudden price swings. It is only in recent years that they have started to attract more general interest.
Bitcoin remains less regulated than most traditional assets, but institutional investors have begun to cast skepticism towards cryptocurrencies as better market infrastructure makes crypto markets more accessible.
The 2020 rally has also been fueled by growing expectations that it will become a mainstream payment method, with PayPal opening its network to cryptocurrencies.
Still, few people or companies use Bitcoin for trading.
Yang Li of digital currency platform Ziglu said that modern personal money applications were at the forefront to ensure easy, secure and fast access to cryptocurrencies.
“Wider adoption will increase the value of Bitcoin even more, this is just the beginning,” Li said.
© Thomson Reuters 2020
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