Bitcoin breached the $20,000 level for the first time in history Wednesday, as crypto enthusiasts pointed to increased demand from institutional investors for the red-hot digital currency. The world’s most-valuable virtual currency traded 5.6% higher to a price of around $20,600, according to market data from Coin Metrics, taking its year-to-date gains to more than 180%.
Bitcoin has been on a tear this year. Analysts say it’s gotten a boost from big-name investors such as Paul Tudor Jones and Stanley Druckenmiller moving their own assets into the cryptocurrency, while tech firms such as Square and MicroStrategy have used their own balance sheets to buy bitcoin. “This is the domino effect as asset managers tumble their portfolios into bitcoin,” Charles Hayter, CEO of crypto market data provider CryptoCompare, was quoted in a story by CNBC.
Bitcoin’s latest record high has reminded many market watchers of its monster rally to nearly $20,000 in 2017. That was followed by a sharp pullback the following year that saw it fall close to $3,000.
Crypto evangelists claim the 2020 rally is unlike 2017 as it’s being driven by institutional buying rather than retail speculation. “$20,000 is undoubtedly a momentous milestone for bitcoin,” said Yoni Assia, CEO and co-founder of online investment platform eToro. “We have seen a significant shift in the demographic of those interested and invested in crypto. No longer the domain of just computer programmers and fintech advocates.”