Optimism over US stimulus assists Bitcoin rally former $60,000 for the very first time

Bitcoin surged to another record, pushing at night $60,000 mark seeing that a good rally fuelled by the US Covid-19 stimulus helped raise the world’s biggest cryptocurrency's price gain to about 1,000 % during the past year.

The digital currency was trading 6.1 % higher on Sunday at $60,935.43 at 1.20pm UAE time. Optimism a $1.9 trillion Covid-19 stimulus package passed the other day in Washington will help the US economy recover more rapidly from the affect of the pandemic has led to a jump in the value of Bitcoin.

“That definitely is among the reasons why all marketplaces are rallying like the selling price of Bitcoin,” Vijay Valecha, chief investment officer at Century Financial in Dubai, said on Sunday. "There is abundant liquidity available in the market."

Bitcoin is bouncing back again from a rout towards the end of last month. It fell about 20 % in the last week of February as growing relationship yields and volatility in global equities prompted a sell-off by investors of dangerous assets. The sell-off used a rally in the digital currency that pushed it previous $50,000 in February just times after it topped a January peak of $42,000.

Gains found in the cryptocurrency have got “completely overshadowed the returns observed in traditional US indices and also commodities like crude oil”, Mr Valecha said.

“During the last 12 month period, the returns look even more lucrative,” he said, adding that the “fear of really missing out [and] limited coin source, which is capped at 21 million coins” can be boosting the price.

Critics, however, express speculative investment is fuelling the rally and its own wild swings mean it isn't a genuine medium of exchange.

“Something with a long-term volatility of 80 % can't be considered a channel of exchange,” Goldman Sachs' Sharmin Mossavar-Rahmani said last month. The US Treasury Secretary Janet Yellen, as well echoed Ms Rahmani sights in February.

Their criticism follows the European Central Bank governing council member Gabriel Makhlouf’s comments who said Bitcoin investors ought to be prepared to “lose all their money”.

That stands in stark contrast to the endorsement the digital currency received last month from Tesla, which said it is investing $1.5 billion into Bitcoin and can soon commence accepting it as a mode of payment for its cars

BNY Mellon, among the oldest lenders found in the US, said it ideas to add digital currencies found in the list of its solutions, while MasterCard said it would start supporting “go for crypto currencies” on its network.

Uber also strategies to get started on accepting Bitcoin and other cryptocurrencies while a form of repayment if it benefits the business and if you will find a need for it, according to its chief executive Dara Khosrowshahi.

“Considering that buying Bitcoin has become a lot easier today, and more companies get excited about this space, we consider [there is] another substantial rally … in Bitcoin's horizon,” Naeem Aslam, chief market analyst at Avatrade explained in an email to investors on Friday.

Globally, regulators consider cryptocurrencies simply because a threat to monetary stability and facilitators of money laundering and criminal activity.

Some central banking institutions are thinking about issuing their private digital currencies, that may co-exist with privately issued cryptocurrencies as the dual financial system evolves, the International Monetary Fund said in a blog page post in February.