Picture: REUTERS/DADO RUVIC
Picture: REUTERS/DADO RUVIC

New York — The world’s largest cryptocurrency rallied above $10,000 again amid optimism digital assets will continue to benefit in the wake of unprecedented global fiscal and monetary stimulus.

Bitcoin rose about 5% on Tuesday to trade near $10,168 midmorning in New York. The rally catapulted the coin to its highest level since mid-February. Bitcoin has advanced more than 40% in 2020, while peer tokens, including litecoin and bitcoin cash, have also posted double-digit gains. Bitcoin still remains about 50% below its record high set before the collapse of the crypto bubble in late 2017.

Cryptocurrency fans have seen prices rise in 2020 thanks to projections that digital tokens can benefit as central banks and governments around the world unleash stimulus measures to shore up listing economies. Some of Wall Street’s best-known names have embraced bitcoin, arguing that crypto assets can act as a hedge against inflation in the current environment.

“The risk-on attitude and all the Fed stimulus is a huge tailwind for bitcoin and the entire digital asset space,” Mati Greenspan, founder of Quantum Economics, wrote in a note. “If the Fed breaks down or if there is an erosion of trust in government-issued currency, then crypto assets may be used as a fail safe.”

That rings true to Nigel Green, CEO and founder of deVere Group, who says steps taken by governments and central banks to boost their economies could trigger a price increase for bitcoin.

“Bitcoin, of course, cannot simply be printed,” said Green. “Indeed, it is living up to its reputation as ‘digital gold’.”

Technical indicators also paint a favourable backdrop for the largest cryptocurrency. Based on the GTI Vera Convergence Divergence Indicator, which measures up and down shifts, bitcoin generated its first new buy signal since early April. Should the coin maintain trading above $10,000, it could rally towards new annual highs. But a sell-off could be in the offing should the token fail to maintain it.

Bloomberg