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Bitcoin poised to charge past $30,000

Dubai - To date the digital currency has risen more than 300 per cent

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The price of bitcoin, after crossing $29,000 Wednesday evening for the first time ever, is on track to charge past $30,000 as investors welcome the new year.

Following a record-setting run over the weekend, the leading cryptocurrency resumed its dizzying spiral after seemingly catching its breath on Monday and most of Tuesday, crypto analysts said.

To date this year, the digital currency has risen more than 300 per cent.

Bitcoin prices hit a high of $29,280.05 before dropping back to $29,231.01, up 5.28 per cent in the last 24 hours.

“Should the expected wave of retail flows materialize, I would expect to see bitcoin charge past $30,000 as we enter the new year,” Denis Vinokourov, head of research at the London-based prime Brokerage Bequant, told CoinDesk earlier.

While institutional investors are perceived to be driving this record-setting run, some fund managers may also be buying bitcoin.

Analysts said the US Federal Reserve, along with other central banks, has been printing money with abandon, trying to stave off the worst economic effects of the pandemic, while U.S. President Donald Trump has been pushing Congress to allow for the issuance of larger stimulus checks. “These actions are viewed by many as potential catalysts for inflation and bad for the U.S. dollar, both of which could be positive for bitcoin.”

Bitcoin has now quadrupled in value this year amid the global coronavirus pandemic, while the wider Bloomberg Galaxy Crypto Index tracking the largest digital currencies is up about 270 per cent as rival coins such as Ether have also rallied.

The latest price surge continues to divide opinion between those who view cryptocurrencies as a hedge against dollar weakness and inflation risk, and others who question Bitcoin’s validity as an asset class given its speculative nature and boom-and-bust cycles, analysts said.

“While a growing institutional presence has been part of the narrative of the current bull run, we may see increased retail interest in Bitcoin as a form of digital gold,” Paolo Ardoino, chief technology officer of crypto exchange Bitfinex, was quoted as saying.

Regulatory concerns also remain a wider factor for crypto investors. The Securities and Exchange Commission this month accused Ripple Labs Inc. and its top executives of misleading investors in affiliated token XRP. While Ripple plans to challenge the accusation in the courts, the development underscores the prospect of stricter oversight of digital assets.

issacjohn@khaleejtimes.com

• Cryptocurrencies