Bitcoin has surpassed $20,000 this afternoon reaching its highest ever level making it one of the best performing assets of the year.
The cryptocurrency jumped 4.5 per cent to trade as high as $20,440 after a strong year which has seen demand from larger institutional investors.
The pandemic has led to a reassessment of bitcoin as an alternative currency with many investors considering it somewhat of a safe haven.
“Since the cryptocurrency’s March lows of $3,6000, it is up 440 per cent, making it one of the best-performing assets of the year,” said Nigel Green, founder and chief executive of crypto exchange Devere.
“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,” said Green.
“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.”
Fund manager Ruffer Investment management added bitcoin now worth around half a million pounds to its portfolio in November, according to Reuters.
A number of hedge fund managers have revealed they have invested in bitcoin. Paul Tudor Jones, who runs Tudor Investment Corp, recently announced he had recommended the cryptocurrency to his clients as a hedge against inflation.
Investors have flocked to crypto using it as an inflationary hedge in the face of continued fiscal stimulus.
Bitcoin proponents say that because supply is capped at 21m it provides an innate value and protects it from policies that stoke inflation.