Bitcoin hits new all-time high after rollercoaster week which saw its price fall 12.5% days ago... will it finally burst through the $20k-a-coin mark?
Bitcoin hit an all-time high today as its surge of more than 170 per cent since the start of 2020 saw it break new ground.
Only days after the cryptocurrency tumbled more than 12.5 per cent in a 24 hour period as some deep-pocketed investors banked their gains, it bounced back and at one point touched a peak of $19,808 a coin.
Although the latest figures from Coindesk put the price at just under $19,500 a coin, or £14,600, the news meant it still surpassed its previous peak set in December 2017.
Bitcoin hit a new all-time high on Monday, breaking the record set in December 2017
It has risen around 8 per cent over the last 24 hours, Coindesk figures said.
Analysts and enthusiasts have predicted over the last few weeks that the world's best-known cryptocurrency would soon surpass the all-time high set three years ago, and some have even said it could hit $20,000 a coin by the end of this year.
Although its price tumbled in mid-March along with the prices of other assets like stocks as the coronavirus pandemic struck Europe and the US, it has bounced back, having risen in price from just under $8,000 a coin in January.
unlike its previous all-time high, which was followed by a similarly spectacular fall, bitcoin's surge this time around has not been driven by speculation and interest from casual investors.
Instead, its rise to a new peak of more than $19,800 has been powered by endorsements from major payments providers like PayPal and Square, and institutional investors who increasingly see it as equivalent to gold at a time when central banks continue to pump billions into economies across the world.
Analysts who have spoken to This is Money as we have reported on bitcoin's recent rise have said that bitcoin's 'cap' of 21million coins appears attractive when there are fears about government-produced currencies losing their value.
The cryptocurrency has had a rollercoaster week, having lost 12.5% of its value overnight on Wednesday before bouncing back
The endorsements by the likes of PayPal and JP Morgan, which suggested it could possibly compete with gold in the future due to its greater popularity among younger people, has also given it more mainstream respectability.
Three years ago the cryptocurrency was better known for its popularity among criminals and those who wanted to overturn the existing financial system.
While it is difficult to guess where bitcoin goes next and for how long its bull run will continue, enthusiasts believe the gains seen this year are based on firmer ground than its rapid rise in 2017.
Changpeng Zhao, the chief executive and founder of the cryptocurrency exchange Binance, which lets investors buy and sell bitcoin, said: 'Anyone who ever bought bitcoin before today and held it is now in profit.
'People will be wondering how sustainable these prices are for bitcoin given the sharp declines in value we've seen near these levels before.
'I can't predict where the price will go from here, but it's notable how much more mature the market is this time around.
'With better liquidity and institutional investors getting involved now that there's more regulatory certainty, it's heartening for those of us who believe in the long-term power of cryptocurrencies to increase the freedom of money globally.'
Simon Peters, an analyst at the investment platform eToro, who predicted last week that the cryptocurrency would hit a new all-time high by Christmas, previously said the announcements by the likes of PayPal 'could provide investors with some comfort that crypto is here to stay.'
Reacting to the news last night, he said: 'Whilst this meteoric rise does look similar to the run of 2017, there are some fundamental differences which indicate bitcoin could go higher still.
'Firstly, it isn’t just the average person on the street buying bitcoin. Larger investors, such as pension funds and hedge funds, are investing in crypto with many seeing it as a hedge against inflation.
'Secondly, the demand continues to outweigh the supply, with investors looking to hold onto their bitcoin.'
He made another bold prediction that the cryptocurrency could hit $25,000 a coin by New Year's Eve, and added : 'At this rate, I wouldn't be surprised if bitcoin becomes a key topic at the Christmas dinner table.'
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