Bitcoin rallies to new record high

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December 21 2020
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Bitcoin has surpassed US$21,000 ($27,688.41) for the first time as the safe haven asset continues to benefit from central banks’ response to the COVID-19 downturn.

Bitcoin’s latest rally has seen its price almost triple this year, reaching a new maximum price of US$24,237.47 ($31,957) on Saturday.

With bitcoin’s supply capped at 21 million coins, bullish investors in the asset class see it as a hedge against inflation, as central banks continue to reduce the cash rate in response to the COVID-19 market downturns.

“We’ve also started to see financial institutions wake up to crypto, with many well-known banks and hedge funds buying bitcoin this year. We expect this to continue into 2021 as fears of inflation continue to creep up globally,” said eToro’s co-founder and CEO, Yoni Assia.

Mr Assia said that while it is easy to focus on the short-term price gains, which are headline-grabbing and attention-worthy, it is also important to recognise how far bitcoin has come, with retail and institutional investors now seeing the value of the alternative asset class.

“We have seen a significant shift in the demographic of those interested and invested in crypto. No longer the domain of just computer programmers and fintech advocates,” Mr Assia said.

“From data programmers and blockchain scientists to plumbers and hairdressers, bitcoin has excited people from all walks of life.”

The CEO highlighted the real-world application for bitcoin’s underlying technology, telling investors the coin can now be part of an investment portfolio or used to pay for a pizza.

“I’ve been a big believer in blockchain technology for many years and think it can help solve some of the world’s ills by helping to bank the unbanked and reduce wealth inequality. Our not-for-profit initiative GoodDollar has already started to try and level the playing field, by developing a crypto based on a universal basic income principles,” Mr Assia said.

Smaller coin ethereum, which often moves with bitcoin, was also trading higher, reaching US$637 ($840).

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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