NEW YORK: The world’s largest cryptocurrency by market capitalisation, bitcoin, has reached another milestone in less than 24 hours as its price topped $22,000.
Bitcoin jumped nearly 15pc in one day and reached $22,327 early on Thursday, setting a new historic high. It was trading at around $22,200, according to Coindesk data as of 6:57am GMT.
After the recent rally, believed to be driven by demand from larger institutional investors, bitcoin’s market cap surpassed $410 billion. To put it in context, that’s more than the market capitalization of JPMorgan or Johnson & Johnson.
On Wednesday, the cryptocurrency broke past $20,000 and has remained above the psychological level since then. Other major cryptocurrencies also saw double-digit growth, with ethereum up around ten percent and Ripple’s XRP rising by 23pc.
Earlier this week, the operator of the Chicago Board Options Exchange (CBOE) announced plans to launch cryptocurrency indexes next year in partnership with CoinRoutes, a trading software firm based in New York. The exchange is set to provide data for several cryptocurrencies with high market caps.
Argument for Bitcoin’s rise is its growing reputation as a haven asset similar to gold as well as a hedge against inflation as central banks engage in massive quantitative easing and asset purchasing programmes to keep their economies afloat during the pandemic.
Ayush Ansal, chief executive of hedge fund, Crimson Black Capital, believes the rise might not be every just yet. “After being in a wasteland since the infamous bull run of late 2017, crypto, and Bitcoin in particular, are back,” he said.
“Bitcoin has been threatening the symbolic $20,000 barrier for some time and finally it has broken through. Public interest in cryptocurrencies will be reignited over the Christmas period, as people start to believe in Bitcoin all over again. “The Covid-19 pandemic has almost certainly contributed to the rebound in Bitcoin. It has changed the order of things and that resonates with many investors right now.
“The resurgence of Bitcoin will once again have Central Banks on red alert. “If they become truly mainstream, Bitcoin and other cryptocurrencies represent an existential threat to the entire banking system.” Bitcoin’s growing popularity is reflected in its performance among exchange traded funds or ETFs, with research by wealth manager AJ Bell showing that it was by some distance the best theme for investors in 2020.
