Daily Management Review

Bitcoin Value Reached Close To Its All-Time High After Surpassing $19,000


Bitcoin Value Reached Close To Its All-Time High After Surpassing $19,000
The value of the crypto currency bitcoin reached near its all time high on Tuesday after it hit a high of $19,000 whch was laos a first for the virtual currency in three years.
Closing at $18,918, near its all-time record of $19,666, there was a 3 per cent rise in the value of the world’s most popular crypto currency on Tuesday. In the month of November alone, the virtual currency saw an appreciation of almost 40 per cent in its value while it has risen by about 160 per cent for the entire year till date.
In a global environment of governments implementing unprecedented fiscal and monetary stimulus aimed at cushioning of the economic hit of the novel coronavirus pandemic, there has been a demand for riskier assets among investors which has driven the rally for bitcoin. Investors are on the lookout for assets that are seen as being immune to inflation amid wide expectations that this virtual currency would soon gain acceptance by the main stream financial market and institutions.
Dizzying gains and equally sharp drops have marked by the 12 year history of bitcoin. in comparison to traditional assets such as stocks or bonds, the markets where bitcoin is traded still is highly opaque.
There are some investors who have claimed that this virtual currency could more than quintuple in price to as high as $100,000 in a year based on the rally that it has witnessed this year. However sceptics have said that those projections and expectations are imaginary and that bitcoin is a purely speculative asset.
“The latest run in bitcoin... has been fuelled by the lack of supply-side liquidity, especially on exchanges,” said Jacob Skaaning of crypto hedge fund ARK36. He added that in the face of high demand, there was a shortage in the volume of bitcoin on trading platforms.
Since bitcoin’s retail-fuelled rally in 2017, bigger investors have been attracted to it with the maturing of the markets where crypto currencies are traded.
The constant increase in investor activities in bitcoin derivatives markets “implies that sophisticated investors and institutional investors are now purchasing bitcoin”, said James Butterfill of digital asset manager CoinShares.
After gaining sharply in recent days, there was a lull in the growth of smaller digital currencies which often move in tandem with bitcoin.