Bitcoin hits new record on inflation fears

Bitcoin rose to a new record as bigger investors bought into the cryptocurrency as an insurance policy against inflation.

The digital currency surged 10.5% to $23,655 and has more than tripled in value in 2020. It hit a fresh high just a day after breaching the $20,000 barrier for the first time.

Bitcoin's supply is limited to 21m, attracting investors looking for a hedge against inflation as governments and central banks spend and loosen monetary policy to prop up economies during the Covid-19 pandemic.

“There will be a search for alternative currencies due to constant fiat money debasement,” Deutsche Bank analysts wrote in a note quoted by Reuters. “It does feel that bitcoin will continue to be in high demand.”

Institutional investors have become less wary of Bitcoin as market infrastructure has improved and expectations have risen that it could become a mainstream payment method. But it is still seen mainly as an asset rather than a means of payment.