Bitcoin breaks above $35,000 to touch new high

Published January 6, 2021
Representations of virtual currency Bitcoin are seen in this picture illustration. — Reuters/File
Representations of virtual currency Bitcoin are seen in this picture illustration. — Reuters/File

Bitcoin traded above $35,000 for the first time in Asia on Wednesday, rising to a high of $35,879 and extending a rally that has seen the digital currency rise more than 800 per cent since mid-March of 2020.

The world’s most popular cryptocurrency had crossed $20,000 for the first time ever almost three weeks ago on Dec 16, 2020.

At that time it hit an all-time peak of $20,800, gaining more than 170pc over the previous year, buoyed by demand from larger investors attracted to its potential for quick gains, purported resistance to inflation and expectations it would become a mainstream payment method.

Bitcoin’s blistering rally saw a massive flow of coin to North America from East Asia, fuelled by hunger for bitcoin among bigger and compliance-wary US investors.

British fund manager Ruffer Investment Management, which managed $27.3 billion in assets at end-November 2020, made a bet on bitcoin now worth around $745 million, a spokesman for the company told Reuters.

The rally in bitcoin, which some investors have seen as a potential safe haven, coincided with spot gold’s drop in recent months.

Some investors such as hedge funds and family offices have in the past been deterred by the opaque nature of the crypto market. Tightening oversight of the American crypto industry has helped soothe some of those concerns.

After touching a record high just under $20,000 in late November, bitcoin stalled and even went below $17,000, stoking fears that it would be a repeat of the asset’s collapse in 2018.

Glassnode, which provides insight on blockchain data, said long-term holders of bitcoin had been selling the virtual currency after it reached the November record peak. It noted however that this was overall a long-term bullish signal rooted in previous price trends.

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