Cryptocurrency Bitcoin traded above $20,000 for the first time ever on Wednesday, December 17, following a sustained run and recording its highest ever mark amid greater institutional and corporate interest. The leading virtual currency peaked at a record-high $20,398.50 before pulling back to $20,145, which was still an intra-day gain of around four percent. Bitcoin has registered a whirlwind rise since March this year when it was at $5,000. The recent gains by bitcoin consist of its broader bull run spurred by online payments giant PayPal after it allowed its customers to use cryptocurrency on its network. The cryptocurrency hit an all-time peak of $20,800 and was last up by 12.5 per cent at $22,190.

The virtual currency has gained more than 170 percent this year, buoyed by the demand from larger investors attracted to its potential for quick gains. Several banks responded to the increasing use of cryptocurrencies and lower utilization of cash, by announcing plans for bank-backed digital units. Meanwhile, the smaller coins such as ethereum and XRP, often moving in tandem with bitcoin, gained 5.4 per cent and 8.1 per cent, respectively.

Here’s all you need to know about bitcoin’s recent blistering rally:

• Bitcoin’s historic milestone came after several attempts and failures to break above the $20,000 mark. Since it has no apparent resistance above this level, it has now entered a price discovery mode and could continue to rise in the near term.
• Bitcoin’s dizzying rally has witnessed a massive flow of coin to North America from East Asia, fuelled by a hunger for bitcoin among bigger and compliance-wary US investors.
• The rally in bitcoin, which some investors have seen as a potential safe haven, has coincided with the spot gold’s decline in recent months.
• The virtual currency has registered a highly volatile session. After touching a record high just under $20,000 late last month, bitcoin stalled and even went below $17,000, instilling fears that it would repeat the asset’s collapse in 2018.
• Bitcoin’s rally is creating a ripple effect in the cryptocurrency market as the majority of Altcoins took cues. Among peers, Ethereum trades at $620 up by 5.6 per cent on a daily basis, whereas Litecoin and Bitcoin Cash are trading up at $89 and $300 respectively.
• Glassnode, which provides an insight on blockchain data, said that long-term holders of bitcoin had been selling the virtual currency after it reached the November record peak. It noted that this was overall a long-term bullish signal rooted in previous price trends.
• A bitcoin is the equivalent of cash but in electronic form. It is similar to any other real-world currency,
• Like a banknote or a coin, bitcoin gives its holder a direct claim on the central bank, offering a greater level of security as a central bank can never run out of the currency that it issues.
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