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- Cryptocurrency becoming popular due to its perceived resistance to inflation
PARIS: Bitcoin, the leading virtual currency, saw its price pass $30,000 on Saturday for the first time, according to data compiled by the Bloomberg news agency.
The first decentralized cryptocurrency passed $30,823.30 at 1313 GMT, after breaking $20,000 on Dec. 16.
Data from Cointelegraph Markets, Coin360 and TradingView showed BTC/USD clinched $30,000 during trading on Friday.
After hitting new all-time highs of $29,700 overnight, the pair showed no signs of weakness, retesting the level several times before a final breakout occurred.
The area immediately below $30,000 had proven a source of intense selling pressure throughout the past few days, a setup similar to that which Bitcoin disrupted at $20,000 just weeks ago.
“If you’re looking for an entry to HODL Bitcoin long term, don’t nickel and dime an entry. You’re not going to sweat a few thousand dollars of non-perfect entry when it is $100,000, $200,000,$300,000 in a year,”
Bloomberg quoted statistician Willy Woo as saying.
Among major altcoins, performance on the day was mixed, with Ether (ETH) staying flat below $740 despite Bitcoin’s latest advances.
Bitcoin is a digital currency that is created by “mining” a blockchain, which rewards users who solve complex equations.
Although some liken it to the tulip craze and other speculative investments, it has attracted numerous world-class investors and financial institutions, particularly in the last six months, according to a report published on deadline.com.
The Bitcoin boom is a tide that is lifting other boats. Such alt-coins as ethereum’s Ether, and Litecoin are also at or near record levels, boosting the overall markets.
A robust cryptocurrency market means good things for new entertainment start-ups, as investors that are flush with extra cash as their cryptos rise are more likely to back disruptive new companies.
Bitcoin’s potential for quick gains, as well as expectations it could become a mainstream payment method, has attracted demand from larger US investors, as well as from traders who normally stick to equities.
Bitcoin’s gains have been fueled by a demand for risk-on assets amid unprecedented stimulus measures to combat the damage from the coronavirus disease (COVID-19) pandemic.
With governments and central banks in full stimulus mode, investors have also sought out bitcoin for its perceived resistance to inflation. East Asia, North America and Western Europe are the biggest bitcoin hubs, with the first two alone accounting for about half of all transfers, according to Chainalysis, which gathers data by region with tools such as tagging cryptocurrency wallets.
Industry experts, however, caution it is too early to call a fundamental shift in the market, particularly in an unprecedented year of pandemic-induced financial turmoil.
“The sudden influx of institutional interest from the North American region is driving a shift in bitcoin trading, which is rebalancing asset allocations across different exchanges and platforms,” said Ciara Sun of Seychelles-based Huobi Global Markets, whose parent company has roots in China and operates in several Asian markets.
Those interviewed by Reuters said compliance-wary US investors, many of whom had been deterred by the opaque nature of the market in the past, are being attracted by the tightening oversight of the American crypto industry.
US exchanges are in general more tightly regulated than many of those in East Asia, and there have been several moves by American regulators and law-enforcement agencies this year to clarify how bitcoin is overseen.
A leading banking regulator said in July, for instance, that national banks could provide custody services for cryptocurrencies. The justice department also outlined an enforcement framework for digital coins in October.
“You’re increasingly starting to see distinctions in the market between those that have no regulatory or little regulatory clarity, versus those that do,” said Curtis Ting of major US exchange Kraken.