Today, Bitcoin reached $20,000 for the first time, highest ever. The cryptocurrency jumped 4.5% to reach $20,440. It has gained more than 170% this year.
The demand from larger investors attracted to its potential for quick gains, purported resistance to inflation and expectations it will become a mainstream payment method
Today, it was up 1.8% at $19,780, just below from its all-time high of $19,918 hit this month.
The price surge has put bitcoin in an attractive bet for investors willing to take riskier positions as they hunt for yield in a record low interest rate environment.
Bitcoin was worth less than $1 back in 2010 when it was positioned as currency for purchases, it is now amassing proponents who argue that its strictly controlled supply and wider investor base show it’s become a store of value.
However, some investors argue that, this year’s 175% rally is a bubble that can’t be supported by claims and digital assets should diversify portfolios and take flows from gold.
A survey conducted between December 4 and December 10 by Bank Of America Corp. revealed that Bitcoin is the third-most crowded trade behind being long technology shares and shorting the US dollar.
Guggenheim Partners LLC, recently said it might invest up to 10% of its $5.3 billion Macro Opportunities Fund in a Bitcoin trust. Meanwhile, some prominent investors, including Paul Tudor Jones, have also joined the tribe, citing potential inflation as a reason to own crypto even though consumer prices remain subdued.