In a record-breaking move, Bitcoin suddenly rose above $60,000 for the first time and as speculations rise, may also cross the $100,000 by the end of this year making it the world’s most popular virtual currency.
Bitcoin, the world’s biggest and best-known cryptocurrency, rose 6.64% to $61,073.71 on Saturday, adding $3,802.67 to its previous close. The virtual currency is up 120.2% from the year’s low of $27,734 on Jan. 4.
Antoni Trenchev, managing partner and co-founder of Nexo in London, a crypto lender reveals, “Bitcoin’s resilience is proving to be the stuff of legend. Every correction is an opportunity to reset and restart the move upwards.”
Bitcoins having crossed about 1,000% in the past year amid exploratory demands and signs of increasing institutional interest, has captured centre stage in the world market. Supporters are promoting the cryptocurrency as a store of value comparable to gold that can act as a guard against inflation and a weaker dollar. While there are others who argue that the rally is a giant bubble on track to burst like it did in the 2017-2018 boom-and-bust cycle. Market strategists and industry participants have a wider take up as one reason why the current drive is different.
Tesla Inc.’s $1.5 billion investment in Bitcoin and CEO Elon Musk’s endorsements of the digital asset on social media are examples of such interest. According to billionaire investor Mike Novogratz, of Galaxy Digital Holdings Ltd., ‘Bitcoin could reach $100,000 by the end of the year’.
As Simon Peters, an analyst at multi-asset investment platform eToro puts it, “The announcement from the White House is very significant for risk assets in general, and crypto-assets specifically,” adding that the “floodgates” are now open in terms of new liquidity.
Bitcoins are traded through a decentralised registry system called blockchain which requires massive computer processing power in order to manage and implement transactions. This power is provided by miners who work in the hope of receiving new bitcoins for validating transaction data.
About 65% of global Bitcoin mining computing power comes from China, according to the Bitcoin Electricity Consumption Index compiled by Cambridge University. Malaysia is fifth-highest on the list with 4.3%.