The virtual currency bitcoin broke its own record and touched an all-time high of as it went past the $20,000 mark.
With the stock market in turmoil this year, the value of this volatile virtual currency has increased by more than 170 per cent.
Pushed by demand from large investors who keen on to gain from the potential of bitcoin to deliver quick profits, the virtual currency touched a record $20,440, jumping 4.5 per cent on Wednesday.
Many investors are also confident that soon bitcoin will also be accepted as a method of payment by the likes of Starbucks and Microsoft.
However, the bitcoin market has been very volatile as it surpassed the $19,000 mark in November bit dropped sharply soon after. In a previous rally in 2017, the virtual currency increased in value to close in on the psychological mark of $20,000. At the same time, huge lows have also been hit by it with it falling as low as $3,000.
Much like real currencies such as the pound and the US dollar, bitcoin is also widely traded. However this virtual currency also has seen increasing support as being a form of payment and PayPal is the most recent adopters of digital currencies.
But warning against the use of bitcoin as a means of payment has been issued by the Bank of England Governor Andrew Bailey.
“I have to be honest, it is hard to see that Bitcoin has what we tend to call intrinsic value,” Bailey said in October. “It may have extrinsic value in the sense that people want it.”
He also said that he was “very nervous” about people using Bitcoin for payments because of the lack of realization among investors that the value of bitcoin was extremely volatile.
Since it was created in 2009, bitcoun has been through many peaks and troughs.
People should expect more “ups and downs” in the coming months in the value of the bitcoin, said Yana Afanasieva, founder of consultancy firm Competitive Compliance.
“That’s the nature of cryptocurrencies as there are some players who could try and manipulate it and there is no government or international body that would try to somehow preserve the price,” she said when asked about a potential crash.
it was “surprising” that an all-time high was achieved by bitcoin, said Lucas Huang at currency exchange platform Tokenlon.
It “may be a sign that institutional buyers have a bigger play in this bull run”, Huang said.
(Adapted from BBC.com)