Bitcoin climbs $19,000 For 1st first time in three years, eyes all-time high

Bitcoin climbs $19,000 For 1st first time in three years, eyes all-time high &  | &nbspPhoto Credit:&nbspThinkstock

New Delhi: Cryptocurrency Bitcoin on Tuesday hit $19,000 (Rs 14,21,662.75) for the first time in nearly three years and was just shy touching an all-time high of just under $20,000. The cryptocurrency has gained around 160 per cent this year as investors are lapping up Bitcoins. Earlier this month, the most popular cryptocurrency has surged to beyond $18500, a level that was last seen in December 2017. 

The Bitcoin is now a few hundred dollars away from its record high levels and given the wild $2000 swing seen recently, one cannot put it past the Bitcoin to reach record highs this month. Various corners of the market are going as far as to give Bitcoin the safe haven label, a label traditionally held by Gold. The rally in Bitcoin is fuelled by a demand for risk-on assets amid unprecedented fiscal and monetary stimulus amid pandemic, hunger for assets perceived as resistant to inflation, and expectations that cryptocurrencies would win mainstream acceptance.

Note that Bitcoin has gained over 37 per cent in November alone. The drop in interest rates, the enormous quantum of money printing by global central bankers have caused many to opt for the digital mode of currency. The safe-haven lure is increased when one looks at the returns delivered by Gold and Bitcoin. In 2020, where Gold has delivered around 24% return, Bitcoin has skyrocketed 160%. The cryptocurrency has surged more than 50% in the last one month alone where Gold has been flattish. The limited supply also acts as another boost for Bitcoin. 

However, Bitcoin’s tendency to wildly oscillate can serve as a warning sign to those intending to buy Bitcoin as a safe haven. More volatility is a sign of the risky nature of an asset. Its huge volatility thus hardly makes it a safe haven as a store of value.

RELATED NEWS

A recent Reuters report cited Bitcoin investors, which include top hedge funds and money managers, saying that the virtual currency could more than quintuple to as high as $100,000 in a year. Bitcoin is within sight of its all-time peak of just under $20,000 hit in December 2017. Note that it debuted in 2011 at zero and was last trading at $19,015.

The agency report cited Brian Estes, chief investment officer at hedge fund Off the Chain Capital, saying that going from $18,000 to $100,000 in one year is not a stretch.“I have seen bitcoin go up 10X, 20X, 30X in a year. So going up 5X is not a big deal,” said Estes.