Digital currency Bitcoin extended its record-smashing rally on Saturday, beginning the year with a surge over US$30,000 for the first time, with ever more traders and investors betting that it is on its way to becoming a mainstream payment method.
The price of the world’s most popular cryptocurrency traded as high as US$33,099 on Saturday, with almost all other markets closed over the first weekend in 2021. It was last up about 12 per cent at US$32,883.
Bitcoin advanced more than 300 per cent in 2020, and with the latest leg higher has added more than 50 per cent since crossing US$20,000 just two weeks ago.
The blockchain currency has only been around for a decade or so, and in 2020 it has seen demand grow among larger U.S. investors, attracted by its perceived inflation-hedging qualities and potential for quick gains, as well as expectations it would become a mainstream payments method.
Investors said limited supply of bitcoin - produced by “mining” computers that validate blocks of transactions by competing to solve mathematical puzzles - has helped power upward moves over recent days.
Some also saw it as a safe-haven play during the COVID-19 pandemic, akin to gold.
“It’s very likely that the asset will eventually pass [US]$100,000 per coin,” Sergey Nazarov, cofounder of Chainlink, a global blockchain project, wrote in an e-mail on Saturday. “People have been steadily losing faith in their government currencies for years, and the monetary policies resulting from the economic impact of the coronavirus have only accelerated this decline.”
It trades on numerous exchanges, the largest of which is Coinbase, which is itself preparing to go public and become the first such platform to list on Wall Street.
Multiple competitor cryptocurrencies use similar blockchain, or electronic ledger, technology. Ethereum, the second biggest, gained 465 per cent in 2020 and was up almost 7 per cent on Saturday.