Bitcoin is picking up momentum once again, pushing above $60,000 for the first time on Saturday amid optimism that the biggest name in cryptocurrency will achieve wider adoption.
The cryptocurrency hit an all-time high of $60,012 at 1149 GMT on Saturday, according to the website CoinMarketCap. The price in Thailand was quoted at 1.84 million baht.
Bitcoin has been on a meteoric rise since March last year, when it stood at $5,000, spurred initially by the online payments giant PayPal saying it would allow account holders to use cryptocurrency. It soared past $55,000 in February but slid back to as low as $41,000 before resuming its upward run.
Cryptocurrency is benefiting from optimism in financial markets after US President Joe Biden signed a $1.9-trillion pandemic-relief bill into law.
“Bitcoin’s resilience is proving to be the stuff of legend,” said Antoni Trenchev, managing partner and co-founder of Nexo in London, a crypto lender. “Every correction is an opportunity to reset and restart the move upward.”
Bitcoin is up about 1,000% in the past year amid signs of increasing institutional interest as well as speculative demand. Advocates champion the cryptocurrency as a store of value akin to gold that can act as a hedge against inflation and a weaker dollar.
But others argue that the rally is a giant stimulus-fuelled bubble on track to burst, just as it did in the 2017-18 crypto boom-and-bust cycle.
Steve Hanke, an economist at Johns Hopkins University and a former adviser to Ronald Reagan, said recently that it’s only a matter of time before Bitcoin “death spirals” down to its true intrinsic value, which is zero.
“What’s the fundamental value of Bitcoin? The fundamental value is zero,” he told Kitco News. “The flow of [income generated by Bitcoin] is zero. It’s not like money. Most fiat monies have a fundamental value because they pay interest. … Bitcoin doesn’t pay interest.”
But industry participants and some strategists point to wider take-up as one reason why the current crypto bull run is different.
Examples include the $1.5-billion investment in Bitcoin by Tesla and chief executive officer Elon Musk’s endorsements of the digital asset on social media. Billionaire investor Mike Novogratz, who runs Galaxy Digital Holdings Ltd, has said that Bitcoin could reach $100,000 by the end of the year.
The imminent injection of huge amounts of stimulus funds into the US economy “is very significant for risk assets in general, and crypto-assets specifically”, said Simon Peters, an analyst at the multi-asset investment platform eToro, adding that the “floodgates” are now open in terms of new liquidity.