Inflation, stimulus cheques drive bitcoin to all-time highs

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March 15 2021
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The world’s largest cryptocurrency briefly crossed a record high of US$60,000 ($77,329) over the weekend, as stimulus cheques and fears of inflation continue to drive up the price of the digital hedge.

The world’s most famous cryptocurrency has surpassed a new milestone, pushing past the US$60,000 barrier and briefly reaching US$61,000 ($78,000) a coin for the first time.

Stats released by Coindesk show that in just a week, the price of bitcoin has risen by 22 per cent.

Over the weekend in Australia, the price of bitcoin climbed 7 per cent to a record high of US$61,556, according to Coindesk, the same weekend that Biden’s US$1,4000 ($1,804) stimulus cheques reached American citizens.

Markets are expecting inflation as the US 10-year Treasury Bonds climbed 1.64 per cent to the highest level since February last year, which also contributed to a rise in hedge assets such as bitcoin.

Since the start of 2021, bitcoin has now tripled in value, with the coin being worth approximately US$20,000 ($26,000) in December 2020.

Bitcoin’s outperformance in 2021 started as large US corporations began accepting payments in the alternative asset class.

eToro crypto asset analyst Simon Peters opined the last few weeks have been a “turning point” for crypto assets, with large US businesses, including Tesla, Mastercard and BNY Mellon, lending their support to the asset class.

“For investors, it’s an exciting time, especially for long-term speculators who will have seen a 60 per cent surge just this month,” he said.

“There are warning signs that there may be a market correction on the horizon, but in the meantime, there seems to be no stopping bitcoin’s upwards trajectory.”

A $1.5 billion bitcoin investment last month by Tesla saw Elon Musk’s electric car company join the likes of MicroStrategy and Square accept payments in the form of digital coins, which sharply lifted the value of bitcoin.

Last month’s announcement saw the coin adding as much as 15 per cent to its value after Tesla made the disclosure in a regulatory filing.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

About the author

Cameron is a journalist for Momentum Media's nestegg and Smart Property Investment. He enjoys giving Aussies practical financial tips and tricks to help grow their wealth and achieve financial independence. As a self-confessed finance nerd, Cameron enjoys chatting with industry experts and commentators to leverage their insights to grow your portfolio.

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