Bitcoin jumped more than five per cent on Friday to fresh record highs of US$41,530, reversing losses from earlier in the session.
The worldâ€™s most popular digital currency slid to as low as US$36,618.36 on Bitstamp exchange before bouncing back. Rival cryptocurrency ethereum rose three per cent after sinking more than 10 per cent.
Bitcoin has rallied nearly 1,000 per cent since a low in March. It topped US$30,000 for the first time on Jan. 2, after surpassing US$20,000 on Dec. 16.
Some market participants had warned of a correction after the US$40,000 milestone was reached, but bitcoin was poised to register itâ€™s 11th session of gains out of the last 12.
Increased demand from institutional, corporate, and more recently retail investors has powered bitcoinâ€™s surge, attracted by the prospect of quick gains in a world of ultra-low yields and negative interest rates.
Ontario city set to allow cryptocurrency for taxes
â€œWe are seeing a continued demand spike driven largely by sustained and unprecedented institutional interest, showing no sign of abating as we move into 2021,â€� said Frank Spiteri of digital asset manager CoinShares.
JPMorgan strategists wrote on Jan. 5 that the digital currency has emerged as a rival to gold and could trade as high as $146,000 if it becomes established as a safe-haven asset.
Interest in the worldâ€™s biggest cryptocurrency soared last year, with investors viewing bitcoin as a hedge against inflation and an alternative to the depreciating dollar.
Bank of America investment strategists on Friday said â€œviolentâ€� inflationary price action in markets helped bitcoinâ€™s rally in the last two months.
But it warned that the cryptocurrency â€œblows-the-doors-off prior bubbles,â€� such as the dotcom bubble in the late 1990s, China in the 2000s and gold in the 1970s.
(Reporting by Kevin Buckland and Thyagaraju Adinarayan, additional reporting by Tom Wilson; Editing by Himani Sarkar and Hugh Lawson)
The post Bitcoin rally â€˜blows-the-doors-off prior bubbles,â€™ Bank of America says – National appeared first on TechFans.