New York, USA (CNN Business) – The price of the cryptocurrency Bitcoin continued to rise, reaching a new high of $ 60,000, Saturday, a few weeks after it crossed the $ 50,000 barrier.
The value of Bitcoin in circulation is more than a trillion dollars.
Bitcoin prices have more than doubled so far this year, up 107% from the December 31 closing price of $ 28,987.60.
Investors are excited that Tesla, owned by American businessman Elon Musk, said in February that it had $ 1.5 billion worth of Bitcoin in its balance sheet.
Tesla also said it is looking to allow consumers to use Bitcoin to buy its cars and SUVs.
This has sparked speculation that other major companies may soon add bitcoin or other cryptocurrencies to their balance sheets, given that Bitcoin has a much higher return on bonds and cash. Software company MicroStrategy is actively buying Bitcoin.
And the best financial firms help validate Bitcoins.
Investors turned to Bitcoin due to the perception that it could be a good hedge against inflation and dollar weakness if bond yields continue to rise.
Some argue that the cryptocurrency is like “digital gold” and could replace the yellow metal as the preferred antidote to inflation. To this end, Bitcoin has risen this year while gold has fallen.
Inflation fears are now back after US President Joe Biden signed a $ 1.9 trillion stimulus package. And there are concerns as to whether this much money is really needed.
Some worry that the stimulus could cause the economy to overheat and lead to much higher inflation. After all, there are now many Coronavirus vaccines and more people are returning to work, which should boost the economy – and Bitcoin prices.
Bitcoin benefited from investors’ realization that the cryptocurrency is much scarcer than gold or other precious metals.
This is because there is only a maximum of 21 million bitcoins embedded in the cryptocurrency source code available for mining – the process of using computers or servers to solve complex mathematical problems to generate bitcoin. Approximately 18.6 million units of Bitcoin are in circulation.
And Bitcoin is not the only cryptocurrency that has received a boost in recent times. Smaller digital currencies, such as Ethereum, Litecoin and Stars, are up in 2021.
