TOKYO / LONDON (Reuters) – Bitcoin jumped more than 5% on Friday to record highs of $ 41,530, reversing losses from the previous session.
The world’s most popular digital currency slipped up to $ 36,618.36 on the Bitstamp exchange before recovering. The ether of rival cryptocurrencies rose 3% after sinking more than 10%.
Bitcoin has risen close to 1,000% since the March low. It topped $ 30,000 for the first time on Jan. 2, after topping $ 20,000 on Dec. 16.
Some market participants had warned of a correction after reaching the $ 40,000 mark, but Bitcoin was about to record the 11th earnings session of the last 12.
Rising demand from institutional, corporate and more recently retail investors has driven the rise of Bitcoin, attracted by the prospect of rapid gains in a world of ultra-low yields and negative interest rates.
“We are seeing a steady increase in demand driven largely by sustained and unprecedented institutional interest, which shows no signs of declining as we move into 2021,” said Frank Spiteri of CoinShares digital asset manager.
JPMorgan strategists wrote on Jan. 5 that digital currency has become a rival to gold and could trade up to $ 146,000 if set as a safe haven asset.
Interest in the world’s largest cryptocurrency soared last year, with investors seeing bitcoin as a hedge against inflation and an alternative to the depreciating dollar.
Bank of America investment strategists said Friday that the action of “violent” inflationary prices in the markets helped Bitcoin’s recovery in the past two months.
But he warned that cryptocurrency “blows up previous bubbles,” like the dotcom bubble in the late 1990s, China in the 2000s, and gold in the 1970s.
Graph: Bitcoin against inflation hedges
Graphic: Bubbly bitcoin
Reports by Kevin Buckland and Thyagaraju Adinarayan, additional reports by Tom Wilson; Edited by Himani Sarkar and Hugh Lawson