Bitcoin in record-breaking madness, jumps 5% on the day

    TOKYO / LONDON (Reuters) – Bitcoin jumped more than 5% on Friday to new record highs of $ 41,530, reversing losses from at the beginning of the session.

    The world’s most popular digital currency slid as low as $ 36,618.36 on the Bitstamp exchange before recovering. Rival cryptocurrency ethereum rose 3% after dropping more than 10%.

    Bitcoin has rallied nearly 1,000% from its March lows. It crossed the $ 30,000 mark for the first time on January 2, after it hit $ 20,000 on December 16.

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    Some market participants had warned of a correction after reaching the $ 40,000 milestone, but bitcoin was poised to record its 11th session of earnings on the last 12.

    Increased demand from Institutional, corporate and more recently retail investors have fueled the surge in bitcoin, attracted by the prospect of quick gains in a world of ultra-low yields and negative interest rates.

    “We are seeing a continued rise in demand driven largely by sustained and unprecedented institutional interest, which shows no sign of abating as we move into 2021,” said digital asset manager CoinShares Frank Spiteri.

    JPMorgan strategists wrote on Jan.5 that the digital currency has emerged as a rival to gold and could trade as much as $ 146,000 if it becomes a safe haven.

    Interest in the world’s largest cryptocurrency soared last year, with investors seeing bitcoin as a hedge against inflation and a alternative to the depreciation of the dollar.

    Bank of America investment strategists on Friday said that “violent” inflationary price action in the markets has helped bitcoin rally over the past two months.

    But he warned that cryptocurrency “blows up previous bubbles,” such as the dotcom bubble in the late 1990s, China in the 2000s and gold in the 1970s.

    Reporting by Kevin Buckland and Thyagaraju Adinarayan, additional reporting by Tom Wilson; Editing by Himani Sarkar and Hugh Lawson

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