LONDON/NEW YORK: Bitcoin soared to a record high against the dollar on Monday, as its 2020 rally steamed ahead, boosted by increased demand from both institutional and retail investors that saw the virtual currency as a safe-haven and a hedge against inflation.
The digital unit touched an all-time peak of $19,864.15, breaking its prior record set nearly three years ago. It was last up 6.1% at $19,306.35. Last Friday, however, bitcoin dropped more than 8%, below $17,000, before rebounding on Monday.
Bitcoin overall has gained more than 170% this year, fuelled by a demand for riskier assets amid unprecedented fiscal and monetary stimulus, hunger for assets perceived as resistant to inflation, and expectations that cryptocurrencies would win mainstream acceptance. Smaller coins ethereum and XRP, which often move in tandem with bitcoin, gained 5.6% and 6.6%, respectively.
Bitcoin's march to its prior peak - reached after frenzied buying by retail investors from Japan to the United States - saw the cryptocurrency gain over 250% in just 35 days before losing 70% of its value in less than two months after its December 2017 high.
"Bitcoin is a natural safe haven for those seeking shelter from rapidly increasing central bank money printing and the inflation that everyone agrees is already increasing," said Sergey Nazarov, co-founder of Chainlink, a decentralized network that provides data to smart contracts on the blockchain.
Christopher Bendiksen, head of research at CoinShares, also cited continued corporate and institutional interest as well as post-Thanksgiving retail demand for bitcoin's renewed surge.
"While circumstantial, price action really started picking up speed when the US woke up this morning, which could reflect buying pressure from retail-oriented platforms such as Square's CashApp, Robinhood and PayPal," he added.
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