Finance

Bitcoin breaks above $20,000 for first time

Updated : December 16, 2020 07:51 PM IST

Bitcoin has gained more than 170 percent this year, buoyed by demand from larger investors attracted to its potential for quick gains.

For the first time, Bitcoin rocketed above $20,000 on Wednesday, boosted by increased demand from both institutional and retail investors. The cryptocurrency jumped 4.5 percent to touch an all-time peak of $20,440.

Bitcoin has gained more than 170 percent this year, buoyed by demand from larger investors attracted to its potential for quick gains, purported inflation-resistant qualities, and expectations it will become a mainstream payment method.

Brian Estes, chief investment officer at hedge fund Off the Chain Capital predicts bitcoin could hit between $100,000 and $288,000 by end-2021, based on a model that utilises the stock-to-flow ratio measuring the scarcity of commodities like gold. That model, he said, has a 94 percent correlation with the price of bitcoin.

Citi technical analyst Tom Fitzpatrick said bitcoin could climb as high as $318,000 by the end of next year, citing its limited supply, ease of movement across borders, and opaque ownership.

Bitcoin breaks above $20,000 for first time

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