Friday 8 January 2021 11:54 am

Bitcoin tops $40,000 as record rally continues

Bitcoin has soared to over $40,000 after another record-breaking day for the cryptocurrency, as investors seek a hedge against inflation. 

The leading cryptocurrency was trading at $41,010.58 by 11.50am according to Coindesk, setting a fresh record as it doubled its value in less than a month. 

Read more: Bitcoin’s record-breaking rally loses steam

Bitcoin, which is created and traded using blockchain technology, has surged in popularity as it is considered an attractive hedging option against traditional financial markets. Many traders have flocked to the cryptocurrency considering it a safe-haven asset which has seen its price increase more than 700 per cent since March. 

It is the first surge for Bitcoin, which was created just 12 years ago, since December 2017 when it jumped to just under $20,000 before crashing to lows of $3,300. 

Its recent price gain has come after renewed interest from institutional investors and has won growing support among the payments industry. 

JP Morgan is bullish on Bitcoin recently saying it had the potential to reach $146,000 in the long term if it becomes established as a safe-haven asset, like gold. 

But on Monday the volatile currency plunged 17 per cent after topping $34,000 for the first time over the weekend. 

Some analysts anticipate the bubble bursting as it approaches $50,000. “We are very much in speculative bubble territory now and while I don’t think its done, it’s becoming increasingly likely that it’s going to get messy as there’s no logic behind what we’re seeing,” Craig Erlam, senior market analyst at Oanda said. 

Read more: Bitcoin turns twelve

“It’s pure speculation and FOMO [fear of missing out] and that never ends well. I previously said I wouldn’t be surprised to see $50,000 before the end of the month and I’m now thinking that was too conservative. The last $10,000 move only took four days. It’s getting silly now.” 

The world’s second largest cryptocurrency Ethereum has also seen increased interest gaining 465 per cent in the last year. This morning it was trading at $1,250.47.