The world’s most well-known cryptocurrency Bitcoin smashed through $20,000 for the first time on Wednesday — its highest ever — amid increased institutional and corporate interest.
The virtual currency reached an all-time high of $20,398.50 before pulling back to $20,145 later in the day — an inter-day gain of nearly four percent.
Bitcoin has seen a meteoric climb since March, following the announcement made by online payments giant PayPal, which said it would enable account holders to use the cryptocurrency. The value of Bitcoin stood at around $5,000 in March, and it has increased 400 percent in the last eight months.
The US Federal Reserve and several other banks — including those in China and Sweden — are also testing digital applications in response to social media giant Facebook's recent moves to produce its own digital currency called Libra. Recently, Libra has been rebranded "Diem" in an effort to show that the project has “organizational independence” as it attempts to gain regulatory approval for launch.
Meanwhile, several other banks have responded to the rise of cryptocurrencies and the slump in the usage of cash by announcing plans for bank-backed virtual units.
Unregulated by any central bank, Bitcoin emerged as a lucrative option for investors who have exotic interests, however, its under-the-radar nature has also attracted criminals.
Debate on whether Bitcoin should be seen as a form of money, an asset, or a commodity has been raging on since the cryptocurrency was launched in 2009. After the unit crossed $1,000 for the first time in 2013, it has been increasingly attracting the attention of financial institutions and also experienced wild price jumps and slumps.
MicroStrategy, a US-based software company, has poured hundreds of millions of dollars into the cryptocurrency in recent months. In fact, it also announced that it was raising another $400 million to buy more Bitcoins. Square, the US-headquartered payments company founded by billionaires Jack Dorsey and Jim McKelvey, also announced a $50 million Bitcoin investment in October this year.
ZebPay, one of India's leading crypto exchanges, predicts that Bitcoin could "easily hit Rs 1 crore by 2030."
"No one knows how far this rally will go, but at some point, there is always a correction. Anyone who pretends to know more than this is fooling himself or others. Long-term prediction is easy though. Bitcoin will continue to go up with periodic corrections. Investors should plan in years, not weeks," ZebPay said in a statement.
Edited by Suman Singh