Bitcoin price has reached yet another all-time high on Christmas Day, breaking its intraday record set five days ago. The value of all bitcoin in circulation is now around $452 billion.
The world’s most popular cryptocurrency surged by as much as 4.2%, having sailed to a new record of $24,661 per coin at one point on Friday. Earlier this week, Bitcoin price crashed by almost $3,000 as news of the SEC’s enforcement against XRP and large-volume profit-taking dragged on prices.
The new all-time record caps a year of gains for the world’s most valuable cryptocurrency. Today’s rally has brought its year-to-date gain to nearly 300%, growing by almost five times since March lows.
No single event seems to have pushed bitcoin’s price to bust out new records on a weekly basis. But, the price resurgence in 2020 makes a different story when compared with bitcoin’s first run-up in late 2017/early 2018. The records set three years ago were driven by retail investors when Bitcoin became a household investment. This explains why it crashed by more than 80% soon after.
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The growing interest from deep-pocket companies, and wealthy investors marks a sharp turn-around. This time, more and more Wall Street institutions have started to see Bitcoin as a safe haven and anti-inflation asset at a time of uncertainty caused by the coronavirus pandemic, driving demand upward.
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Other factors that have supported its recent record gains include PayPal officially making its move into the cryptocurrency market. Further, a number of large institutional investors showed interest in investing into products tied to the cryptocurrency.
Cryptocurrency funds and products have amassed inflows of $5.24 billion so far this year. This pushes the sector’s assets under management to $14.5 billion despite the economic shock of the coronavirus pandemic, according to the latest figures from CoinShares.
Throughout 2020, New York-based Grayscale Investments, the world’s largest crypto-fund manager, saw $4.6 billion in YTD inflows, its best year ever.
Square Inc., a payments company founded and run by Twitter CEO, Jack Dorsey, also said revenue made from selling bitcoin to its Cash App customers nearly doubled, coming in at a total of $1.63 billion compared to $875 million in the previous quarter. Moreover, this figure marks an 1100% increase from the amount reported in the same period in 2019.
Square’s Chief Financial Officer, Amrita Ahuja said he believes that bitcoin has the potential to be “a more ubiquitous currency” in the future. Continuing, he argued that as the cryptocurrency grows in adoption, they intend to “learn and participate in a disciplined way. For a company that is building products based on a more inclusive future, this investment is a step on that journey.”
Furthermore, Ahuja believes that bitcoin’s very structure will ensure that its value will only increase with time.