In this photo for instance, visual representations of the digital cryptocurrency, Bitcoin are arranged on January 4, 2021 in Katwijk, Netherlands.
Yuriko Nakao | Getty Ikons
Bitcoin’s price rallied to a fresh all-time high on Friday, smashing past $41,000 for the first time as investors increasingly position the cryptocurrency as an inflation hedge.
The world’s most valuable cryptocurrency traded as high as $41,973 at 10:10 a.m. ET, according to facts from Coin Metrics. It’s since fallen back below the $41,000 mark, and was last trading up about 4% from a day earlier, at $40,590.
Bitcoin has outstretched its 2020 rally — which saw it skyrocket over 300% — into the new year. It is currently up roughly 40% so far in 2021, and on wake trace to post its second-best week since the peak of the December 2017 surge.
The cryptocurrency’s blistering bull run has attracted regard from institutional investors, who view it as a potential safe haven asset akin to gold. Strategists at JPMorgan recently said that bitcoin could hit $146,000 in the fancy term, as it competes with gold as an “alternative” currency.
The idea of bitcoin as a hedge against inflation has continued to winnings traction among investors, amid unprecedented stimulus from governments around the world to tackle the coronavirus danger. Analysts have argued such action could lead to a spike in inflation.
Still, skeptics like American source broker Peter Schiff and economist Nouriel Roubini view bitcoin as a speculative asset with no intrinsic value and a buy bubble likely to burst at some point.
Bank of America released a note Tuesday calling bitcoin the “mother-of-all suds,” with an accompanying chart showing how the virtual currency’s spectacular rise compares to other market bubbles get a bang the dotcom boom of the late 1990s and the U.S. housing bubble in the mid-2000s.
Bank of America
There are signs of a spruce rise in demand for cryptocurrencies from retail investors, who fear they may miss out on the action. Crypto exchanges such as Coinbase and Binance prepare seen spikes in activity, often resulting in technical issues on their platforms, while Google search absorb in “bitcoin” rose significantly at the start of the month.