Bitcoin continued to break new ground on Thursday, briefly rising past $23,000 (£16,202).
Bitcoin rose over 8% against the dollar to hit a record high of $23,586.91 (BTC-USD) in early trade in London. The cryptocurrency had fallen back to around $22,826 by mid-morning, a gain of just over 3% on the day.
Thursday’s early price action marked the second new all-time high in as many days for bitcoin. On Wednesday, bitcoin passed the $20,000 mark for the first time, a psychologically significant level bulls had been targeting for months.
Tumbling records come after a storming rally that began in late October. Bitcoin has rallied over 100% since the start of October and is up around 180% across 2020.
“In a period where bonds are yielding negative rates, big banks having the audacity to pay negligible interest and charge for even basic bank accounts it is no wonder more and more people are looking to store some of their money in cryptocurrencies,” said Yang Li, chief growth officer of crypto company Ziglu.
The rally has coincided with increased institutional interest in the cryptocurrency.
Square (SQ), Twitter founder Jack Dorsey’s payment company, invested $50m in bitcoin in October. That same month rival PayPal (PYPL) said it would allow customers to buy and hold crypto through its app. Square has let people buy crypto through its Cash app since 2018 and said last month 80% of Cash’s third quarter revenue came from bitcoin trading.
Traditional finance players have been getting into the market alongside tech companies. High profile hedge fund manager Paul Tudor Jones bought bitcoin in May as a hedge against inflation. It marked one of the highest-profile endorsements of bitcoin from a traditional money manager.
Others have followed since then. A fund manager survey by Bank of America, published this week, found that going long bitcoin was one of the most crowded trades in finance. 15% of fund managers who responded to the survey had taken this position, making it the third most popular trade.
“While a lot of scepticism still surrounds cryptocurrencies, some in the investment community appear to have warmed to them,” said Michael Hewson, chief market analyst at CMC Markets. “This appears to be what is helping to drive the current move higher.”
The latest institution to climb on the bitcoin train is London-based Ruffer Investment Management, which has £20bn of assets under management. The firm on Wednesday said its Multi-Strategies Fund had put 2.5% of its assets in bitcoin.
“We see this as a small but potent insurance policy against the continuing devaluation of the world's major currencies,” management said in a statement.
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