Bitcoin continued its rally at the end of the year, jumping to a new high of over $ 28,500.
The cryptocurrency gained more than 5 percent to reach $ 27,835 today, Wednesday, which constitutes a 47 percent increase since the beginning of December and is on its way to achieving its biggest monthly gain since May 2019.
Bitcoin’s value has nearly quadrupled this year as interest from institutional investors has grown.
With the decline in the US dollar, Bitcoin is becoming a more attractive investment amid concerns that massive government stimulus packages caused by the coronavirus pandemic are fueling inflation.
The dollar fell to its lowest level since April 2018 on Wednesday, when measured against a basket of currencies.
The US currency is under pressure as investors move to more risky assets, and betting on a strong economic recovery next year with the introduction of coronavirus vaccines.
Bitcoin has also been boosted by expectations that it will become the most popular payment method, and PayPal has launched a cryptocurrency trading service through its platform.
It has reportedly bought nearly 70 percent of all new Bitcoin in circulation, and a number of hedge fund managers this year revealed that they have invested in the cryptocurrency.
Bitcoin is described as an alternative to gold, it is the traditional investment as a safe haven, and gold fell after it reached a record high of more than $ 2000 an ounce in August, and now settled at $ 1879 an ounce.
Some analysts expect Bitcoin to compete with gold for dominance in the coming year.
Paolo Ardoino, chief technology officer at the cryptocurrency exchange Bitfinex, said Bitcoin could attract more interest from a wider audience, not just fund managers.
He added: Although increased institutional presence has been part of the current upside, we may see increased retail interest in Bitcoin as a form of digital gold.
Other cryptocurrencies, such as Ether, have also risen, however, concerns remain about the speculative nature of cryptocurrencies, and there are regulatory issues.
The US Securities and Exchange Commission last week accused Ripple and its chief executives of misleading investors about XRP, the world’s third-largest cryptocurrency by volume, by selling $ 1 billion in virtual tokens without registering with the commission.