TOKYO (Reuters) – Bitcoin traded at $ 33,365 in Asia on Monday, hitting a record high of $ 34,800 on Sunday as investors continue to bet that digital currency is on track to become a major asset .
The last milestone in the world’s most popular cryptocurrency came less than three weeks after it crossed $ 20,000 for the first time, on Dec. 16, and bitcoin has now risen 800 percent since mid-March.
With the limit of bitcoin supply at 21 million, some consider it a protection against the risk of inflation, as governments and central banks activate stimuli in response to the COVID-19 pandemic. Some also see it as a work of refuge during the gold-like COVID-19 pandemic.
“Something reflects the fear of a weaker dollar,” Bank of Singapore foreign exchange analyst Moh Siong Sim said of the latest rally.
“People seem to prefer bitcoin as an expression of concern about currency degradation, relative to gold.”
Bitcoin’s advancement also reflects the growing expectations that it will become a major payment method, with PayPal opening its network to cryptocurrencies.
The potential for quick gains has also attracted demand from larger U.S. investors, as well as traders who typically adhere to stocks.
“The rally gained even more momentum as insatiable investors continued to trade from home” during the New Year’s holidays, said Dave Chapman, chief executive of digital asset company BC Group-based in Hong Kong.
Institutional investors see the potential for higher risk-adjusted returns compared to traditional investments, he said.
Bitcoin is listed on numerous stock exchanges, one of the largest of which is Coinbase, which is preparing to go public to become the first major US cryptocurrency exchange to appear on Wall Street.
The cryptocurrencies of several competitors use technology similar to blockchain or e-book. Ethereum, the second-largest, hit a record $ 1,014 on Sunday.
Reports by Kevin Buckland; Additional reports by Tom Westbrook and Alun John; Edited by Jacqueline Wong, Kenneth Maxwell and Raju Gopalakrishnan