Bitcoin trades near Sunday’s $ 34,800 record after rising 800%

TOKYO (Reuters) – Bitcoin traded at $ 33,365 in Asia on Monday after reaching a record high of $ 34,800 on Sunday, with investors betting that the digital currency is becoming a popular asset.

The last milestone for the world’s most popular cryptocurrency came less than three weeks after exceeding $ 20,000 for the first time on December 16, and bitcoin has now increased by about 800% since mid-March.

With the bitcoin supply limited to 21 million, some see this as a hedge against the risk of inflation, as governments and central banks open stimulus taps in response to the COVID-19 pandemic. Some also see it as a safe haven during the gold-like COVID-19 pandemic.

“Part of that reflects the fear of a weaker dollar,” said Moh Siong Sim, an analyst at the Bank of Singapore, of the latest recovery.

“It seems that people are preferring bitcoin as an expression of concern about the currency’s devaluation against gold.”

Bitcoin’s advancement also reflects growing expectations that it will become a conventional payment method, with PayPal opening its network for cryptocurrencies.

The potential for quick gains has also attracted the demand of major US investors, as well as traders who are normally limited to stocks.

“The recovery gained even more momentum as insatiable investors continued to trade from home” during the New Year holiday, said Dave Chapman, Executive Director of Hong Kong’s digital assets company, BC Group.

Institutional investors see the potential for higher risk-adjusted returns compared to traditional investments, he said.

Bitcoin is traded on several exchanges, one of the largest of which is Coinbase, which is preparing to go public to become the first major U.S. cryptocurrency exchange to be listed on Wall Street.

The cryptocurrencies of several competitors use blockchain technology or similar electronic ledger. Ethereum, the second largest, hit a record high of $ 1,014 on Sunday.