- Original cryptocurrency Bitcoin (BTC) has kicked off 2021 with a bang, reaching a record high of over US$34,000 (roughly A$44,000) on the first trading day of the year
- It marks a new high point for the crypto’s Christmas bull run, which started in late October despite taking a hit as the pandemic hit global markets in April
- Bitcoin’s limited supply and option as a viable non-government regulated payment alternative make it an appealing asset to certain investors
- The currency is up a staggering 360 per cent on its January 2020 price
Original cryptocurrency Bitcoin (BTC) has kicked off 2021 with a bang, reaching a record high of over US$34,000 (roughly A$44,000) on the first trading day of the year.
Bitcoin is considered the largest cryptocurrency based on market capitalisation and the volume of data stored on its blockchain.
The crypto had something of an understated start to 2020, floating around the $9000 to $10,000 mark throughout the year, but took a hit and dropped to just under $5000 as COVID-19 ravaged global indices.
Its recovery was swift, eventually regaining ground and hitting $13,000 in late October.
The bull run continued through the Christmas period and Bitcoin has entered the new year with a shiny new record high of US$34,544 (roughly A$44,800) a staggering 360 per cent increase since the start of 2020.
First appearing in 2009 and based on a whitepaper by Satoshi Nakamoto, Bitcoin can be thought of as something like digital gold in terms of scarcity and value proposition.
Why the rally?
Investors seem to recognise Bitcoin as a viable mainstream currency alternative, offering them a non-government regulated, decentralised payment method.
Its ascent could also be attributed an announcement by PayPal in October which granted crypto traders the ability to buy and sell Bitcoin and other virtual currencies using their PayPal accounts.
Iconic Wall Street player Bill Miller coined the currency’s success a case of supply and demand.
“The bitcoin story is very easy, it’s supply and demand,” Bill explained to CNBC in November 2020, just as Bitcoin prices were regaining traction.
“Bitcoin’s supply is growing at around 2.5 per cent a year, and the demand is growing faster than that and there’s going to be a fixed number of them,” he commented.
“I think the risks of bitcoin going to zero are much, much lower than they’ve ever been before,” he concluded.
According to crypto trading platform Coindesk, approximately 21 million bitcoins will ever be created — there are 18.56 million currently registered.