Bitcoin kicked off this week with a rebound, advancing beyond $12,000 to its highest level in more than a year and a half. The world's largest cryptocurrency grew 5.3% to about $12,473 in New York, the largest increase since July 2019, reports Bloomberg.
Peers, including Bitcoin Cash, Litecoin and Monero, also won, with the Bloomberg Galaxy Crypto Index reaching its highest peak since June 2019.
After trading sideways for much of the summer, Bitcoin rebounded at a time when a rise in the stock market pushes the S&P 500 close to a new historical record. And in an environment of ultra-low rates, several analysts and fans of cryptocurrencies say that Bitcoin - along with other assets such as gold - could take on itself as a hedge against inflation if prices start to rise.
"Inflation is low, but real yields are generally negative - negative real yields and monetary stimulus/spending have led investors to look for inflation hedges, like gold," said Seamus Donoghue, vice president of sales and development for METACO's business to 'Bloomberg'.
"Due to its limited supply and growing institutional acceptance, Bitcoin is also likely to benefit from the market that seeks protection against inflation," added the expert.
Bitcoin's advance beyond $12,000 makes it one of the best performing asset classes this year, having gained around 70% since late December and up more than 100% since mid-March when it was briefly traded below $4,000.
The increase registered this year still leaves it about 40% below the historical record of almost 20 thousand dollars reached in December 2017.