Bitcoin soared to a new record high above $33,000 on Saturday and has tripled in value in the past year.
Investors have been attracted to the cryptocurrency as the US dollar has weakened and with the Federal Reserve expected to leave interest rates near zero for several years, well known names are adding to bitcoin’s appeal.
Investors have been attracted to the narrative that the cryptocurrency could act as a store of wealth amid rampant central-bank money printing in the past year to bolster an economic recovery from the coronavirus pandemic.
PayPal PYPL recently allowed users on its platform to purchase bitcoin
as well as other sister cryptos like ethereum ETHUSD Bitcoin Cash and Litecoin LTCUSD. Square’s SQ popular Cash App also allows users to buy and sell bitcoins.
This isn’t bitcoin’s first price spike. It had a rally in 2017 but its price slumped to just over $3,000 by early 2019 as China cracked down on cryptocurrency businesses. It then soared past $20,000 in December, climbing rapidly in the past month.
Still, Bitcoin remains a thinly traded market and the rally in 2017 was followed by an 83% collapse that lasted a year.
Coinbase saw a large spike in buyer activity Saturday with analysts saying the trend was reminiscent of MicroStrategy’s
Bitcoin accumulation, possibly fueled by institutional buy orders, according to CoinTelegraph.
In the last 48 hours, Coinbase has continuously seen a high premium compared to other platforms. When the price of bitcoin surpassed $30,000, the premium reached as high as $350.