The surge in value marks an extraordinary rebound from last week’s falls and has sparked rises in other cryptocurrencies such as ether and litecoin. Antoni Trenchev, managing partner of London-based Nexo, which bills itself as the world’s biggest digital-coin lender, said: “Fear of missing out is slowly kicking in. We are only just beginning to see some of our retail clients borrowing against their bitcoin to buy more bitcoin and that will ultimately propel the rally well into the $20,000s.”
Fear of missing out is slowly kicking in
Gunnar Jaerv, chief operating officer of Hong Kong’s First Digital Trust said the surge was “likely a result of major institutional investors joining the bandwagon and purchasing a portion of BTC’s limited supply in the midst of a bull run”.
Edward Moya, a senior market analyst at foreign exchange specialist Oanda, said: “Bitcoin and all the major altcoins are rallying strongly, and it seems the momentum trade is strengthening as mass media outlets embrace crypto coverage.”
Bitcoin was worth less than $1 when it was touted as a potential currency in 2010 but experts believe its strictly-controlled supply and wider investor base prove it is now a good-value option.
Bitcoin has soared to record highs
Critics of the cryptocurrency, which uses a decentralised ledger called a blockchain to record and verify transactions, warn it is still to volatile and to make such gains sustainable.
The last time bitcoin approached $20,000 in December 2017 it suffered a spectacular crash which wiped out a quarter of its value in a single day before falling well below the $4,000 mark in late 2018.
Vijay Ayyar, head of business development with crypto exchange Luno in Singapore, said investors were now targeting rises of up to $25,000 but warned bitcoin gets “everyone bullish and then dump”.
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Some analysts believe Bitcoin could become as popular as gold with investors
But its price has risen by about 170 percent this year and fans are confident it will surpass gold as the the investor’s number one safe haven.
Glen Goodman, author of the bestselling book The Crypto Trader said: “It’s doubled in price in just a couple of months – incredible momentum – but when it eventually turns, it could easily fall just as fast, as it did after the last boom.
“The long-term potential is considerable, but the short-term danger level is high.
“Bitcoin has now shown it has real staying power the longer-term picture is looking very promising.”
He continued: “Some of the world’s biggest investors say they’re now buying bitcoin as well as gold in their effort to find a safe-haven for their wealth.
“They suspect governments are keen to inflate away debts by printing lots of extra cash, which may lead to inflation.
“This would mean any assets held in currencies like dollars or pounds would lose value, so investors are searching for alternative currencies like bitcoin and gold.
“Big investors are hoovering up the scarce bitcoin supply, as well as Paypal, Square and other payments companies.
“However, new research shows most bitcoin holders are not selling. So with lots of demand and not much available supply, the price is being forced upwards.”
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Tyler and Cameron Winklevoss, venture capitalists dubbed the first bitcoin billionaires, said the currency was on track to soar to $500,000 within the next 10 years as it takes an increasing role in the global financial system and surpasses gold as a store of value.
Tyler Winklevoss tweeted: “Onward and upward we go to the moon!”