Cryptocurrency: Bitcoin hits three-year high

Bitcoin

Bitcoin, the world's best-known cryptocurrency, has jumped above $17,000 (£12,800) to hit a three-year high.

The digital currency has suffered plenty of wild price swings since it was launched in 2009.

But investors have been flocking to cryptocurrencies during the pandemic-driven volatility on global stock markets.

However, experts have cautioned about viewing them as a "safe haven".

On Wednesday, Bitcoin had climbed more than 7% to $17,891, its highest level since December 2017.

Some analysts said the Covid-19 pandemic has encouraged investors to reassess the long-term outlook for Bitcoin and other cryptocurrencies.

But there are still concerns about the fraudulent trading in cryptocurrencies following a succession of high-profile hacks.

'Bouncing like a yo-yo'

During times of volatility, investors tend to move their money out of shares and into what are considered safer havens, like cash and gold.

Some feel cryptocurrencies are now being viewed as a shelter from stock market volatility.

"Covid-19 has disrupted the traditional safe-haven trade and gold's inability to outperform. Periods of extreme risk aversion have forced many traders to diversify into Bitcoin," said Edward Moya, at trading firm Oanda.

One attraction of Bitcoin is its limited supply, which is capped at 21 million.

Source:
BBC