Bitcoin hits all-time high, surging past R296 000
By Nigel Green
Bitcoin reached an all-time price high by surging past $20,000 (R296 000) on Wednesday afternoon.
Just after 1 pm GMT, the price of the world’s largest cryptocurrency by market capitalisation was $20,637.18.
Two weeks ago, it was widely reported that Bitcoin nearly hit the all-time high of $19,850 in December 2017.
Of this milestone, we’ve been saying for a few months now that Bitcoin is likely to surpass its previous all-time high before the end of this year – and it now has.
Since the cryptocurrency’s March lows of $3,600, it is up 440%, making it one of the best-performing assets of the year.
Many investors and crypto advocates will be extremely glad that they kept their Bitcoin and didn’t sell.
Unlike previous surges, this time around, a major price driver seems to be fuelled by the flow of institutional investors, who are steadily increasing their exposure to Bitcoin and other cryptocurrencies.
They’re being attracted by the good returns that the digital asset class is currently offering but, more importantly, by the huge future potential it offers.
As some of the world’s biggest institutions – amongst them multinational payment companies and Wall Street giants - pile ever more into crypto, bringing with them their enormous expertise and capital, this in turn, swells consumer interest.
Another important reason for a spike in the Bitcoin price is because it is a hedge against longer-term inflation concerns which have come to the fore due to stimulus packages – more of which are promised by major governments and central banks around the world.
These emergency measures, like the massive money-printing agenda, reduce the value of traditional currencies like the dollar and raise the inflation threat. Bitcoin, like gold, acts as a shield.
As Bitcoin hit all-time highs last month, an other inherent characteristics of cryptocurrencies are piquing interest too.
These include that they’re borderless, making them perfectly suited to a globalised world of commerce, trade, and people; that they are digital, making them an ideal match to the increasing digitalization of our world; and that demographics are on the side of cryptocurrencies as younger people are more likely to embrace them than older generations.
After a year of historic highs and lows in financial markets, it will, after all, be a Merry Christmas for Bitcoin holders.
And, in the current environment, it looks like 2021 could be another momentous year for them too.
Nigel Green is the founder and CEO of deVere group.