Bitcoin on Wednesday broke through $20,000 for the first time ever following a sustained powerful rally for the world's largest and most well-known cryptocurrency.
Bitcoin surged over 14%, trading at a record $22,288.93 on Thursday, according to data from cryptocurrency site CoinDesk.
Notably, the cryptocurrency, which was valued at around $5,000 in March 2020, has nearly tripled this year.
Here are more details.
Bitcoin has surged despite suffering a severe crash earlier this year in March when the cryptocurrency lost 25% in value amid the coronavirus pandemic.
It has been trading higher since digital payments firms PayPal and Square allowed account holders to use cryptocurrency on their platforms, raising hopes that the cryptocurrency would become a more widely used payment method.
This year's Bitcoin surge has also been attributed to investors looking for fast gains and resistance to inflation, including big names such as Stanley Druckenmiller and Paul Tudor Jones.
Cryptocurrency backers say the 2020 surge is unlike its blistering 2017 rally, which pushed Bitcoin near the $20,000 mark, since this year's surge is being driven by institutional investors.
Charles Hayter, CEO of crypto market data provider CryptoCompare, told CNBC, "This is the domino effect as asset managers tumble their portfolios into Bitcoin."
Yoni Assia, CEO and co-founder of online investment platform eToro, added, "We have seen a significant shift in the demographic of those interested and invested in crypto. (It is) no longer the domain of just computer programmers and fintech advocates."
Further, S&P Dow Jones Indices had recently announced plans to launch cryptocurrency indices next year.
UK asset manager Ruffer also revealed on Tuesday that it had 2.5% of its portfolio invested in Bitcoin.
The company said, "Bitcoin diversifies the company's (much larger) investments in gold and inflation-linked bonds, and acts as a hedge to some of the monetary and market risks that we see."
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