2020 has been the year of surprises, and its series of thunderbolt does not seem to be slowing down anytime soon. On Wednesday — the most widely known cryptocurrency — bitcoin has surpassed its all-time high value of $22,000. This is by far the largest valuation cap for any other digital currency that has yet to be achieved.
The cryptocurrency rose by as much as 10 percent on Wednesday to reach $22,134 (£16,310) against the US dollar in New York. It happened just 15 days before the end of 2020, when the global market is standing at the onset of the new year. This is not the first time when Bitcoin has outnumbered other cryptocurrencies. In 2017, Bitcoin also had hit a nearly $20,000 valuation limit. The 2017 valuation surge in Bitcoin price had also become the cause of many speculations around this digital currency, as it plummeted soon after achieving the then all-time high valuation price. After a 900% surge, resulting in the value touching $20,000 by mid-December, the Bitcoin crashed below $7,000 by early February 2018. Unlike the previous event, this rise in price has been seeing for a relatively long time. The reasons are more likely to be the inflation hikes due to the coronavirus pandemic and the growing interest of investors in the cryptocurrency.
The price of bitcoin has seen a surge of more than 400% this year while it had touched the low point of around $3,600 in March 2020. It was when the wave of coronavirus pandemic forced the market to shut down, and a global lockdown was enforced. It jeopardized the global economy altogether and triggered a profound decline in market sales. During a lockdown, due to the closed physical marketplaces, the online sellers have seen a remarkable boost in their market stocks.
According to the investors, reported by The Guardian, this most recent rise in the Bitcoin price is due to the inclusion of more institutional investors in buying the cryptocurrencies. Nigel Green, the Chief Executive of deVere Group, an independent financial advisory organization, commented:
“They’re (investors) being attracted by the good returns that the digital asset class is currently offering but, more importantly, by the huge future potential it offers. […]. As some of the world’s biggest institutions – among them multinational payment companies and Wall Street giants – pile ever more into crypto, bringing with them their enormous expertise and capital, this, in turn, swells consumer interest.”
According to other analysts, blowing past $20,000 was a hard nut to crack, and it will be useful to bring change in the mindset of most traders; thus, it is providing new ground for bitcoin and opens the doors for a climb to $100,000 at some time in the future, probably in 2021. In one of the biggest indicators of growing demand among conventional investment managers, the UK-based investment management company with more than £20bn in assets under management, Ruffer made a bet on bitcoin last month, which is now worth around £ 550 m.