Cryptocurrency Bitcoin jumped by more than $850 – or 5 per cent – to touch the $18,238.20 mark on Sunday, inching towards an all-time high of $19,666 registered this week. Recent gains in the virtual currency are part of a broader bull run that began last month after US-based online payments company PayPal allowed its customers to use Bitcoin on its network. It was last seen trading higher by over $800 to $18,173.70 on November 29, 2020. (Also Read: Bitcoin Hits $19,000 For First Time In Three Years, Eyes All-Time High)
Most other cryptocurrencies followed suit. Among major peers, Ethereum (ETH) traded 5.11 per cent higher at $556.16, XRP was up 6.83 per cent at $0.62688 and Cardano (ADA) up 0.24 per cent at $0.169106.
Bitcoin has surged exponentially since entering a four-digit value for the first time in 2013. It has rallied more than 130 so far this year, fueled by demand for riskier assets. (Also Read: Bitcoiners Who Missed Rally Express Relief And Regret)
The cryptocurrency’s perceived quality as a hedge against inflation and expectations of mainstream acceptance lured institutional and retail demand.
Bitcoin’s 2020 rally has drawn momentum from strong appetite for riskier assets following unprecedented government and central bank stimulus measures to combat impact of the COVID-19 pandemic, and its reputation for being inflation-proof.
Major central banks around the globe are exploring whether to allow the issuance of digital currencies. A bitcoin, similar to any other real world currency, is the equivalent of cash, but in electronic form.
Like a banknote or coin, it gives its holder a direct claim on the central bank, bypassing commercial banks and offering a greater level of security as a central bank can never run out of the currency it issues.