TOKYO (Reuters) – Bitcoin traded at $ 33,365 in Asia on Monday after hitting a record $ 34,800 on Sunday, while investors continue to bet that digital currency is about to become a mass asset.
The latest stage for the world’s most popular cryptocurrency came less than three weeks after it passed $ 20,000 for the first time on December 16, and bitcoin has now risen about 800 percent since mid-March.
With the Bitcoin offer capped at 21 million, some see it as a hedge against the risk of inflation, as governments and central banks activate stimulus taps in response to the COVID-19 pandemic. Some also consider it a gold-like refuge during the COVID-19 pandemic.
“Some of them reflect the fear of a weaker dollar,” Bank of Singapore currency analyst Moh Siong Sim said of the latest rally.
“People seem to prefer bitcoin as an expression of concern over currency degradation over gold.”
The Bitcoin advance also reflects the growing expectations that it will become a common payment method, PayPal opens its network to cryptocurrencies.
The potential for quick gains has also attracted demand from larger US investors as well as from traders who normally hold on to stocks.
“The rally gained even more momentum as insatiable investors continued to trade from home” during the New Year holidays, said Dave Chapman, CEO of Hong Kong’s digital assets company BC Group.
Institutional investors see higher return-adjusted potential for risk compared to traditional investments, he said.
Bitcoin trades on numerous stock exchanges, one of the largest of which is Coinbase, preparing itself to go public to become the first major US currency exchange to appear on Wall Street.
Multi-competitor cryptocurrencies use similar blockchain or electronic accounting technology. Ethereum, the second largest, set a record $ 1,014 on Sunday.
Reporting by Kevin Buckland; Additional reporting by Tom Westbrook and Alun John; Edited by Jacqueline Wong, Kenneth Maxwell and Raju Gopalakrishnan