Bitcoin above $80k again propelled by talk of reduced supply

Bitcoin rose above US$60,000 (S$80,000) to approach record highs on the weekend, breaking out of a two-week tight range and propelled by talk of constrained new supplies against evidence of wider adoption.

The world’s biggest and best-known cryptocurrency hit $61,222.22 on Saturday, its highest in nearly a month. It was slightly lower at $59,907 at 0500 GMT on Sunday.

Bitcoin (BTC) is up 116per cent from the year’s low of $27,734 on Jan. 4. It crossed the $60,000 mark for the first time on March 13, hitting a record $61,781.83 on Bitstamp exchange, just after U.S. President Joe Biden signed his $1.9 trillion fiscal stimulus package into law.

Justin d’Anethan, sales manager at digital asset company Diginex in Hong Kong, said investors had turned their attention to stock markets and other cryptocurrencies in the past couple of weeks, leaving Bitcoin idling in the upper 50-thousand dollar levels.

ALSO READ: If you invested $10k in Bitcoin, Tesla or the 'best' Singapore REIT 2 years ago, what would that be today?

“That changed just yesterday when we pierced through 60K. With miners not selling recently minted coins, on-exchange reserves hitting multi-year lows and an incessant stream of corporates, funds, large and small investors piling into BTC, we punched through,” he said.

Bitcoin’s stunning gains this year have been driven by its mainstream acceptance as an investment and a means of payment, accompanied by the rush of retail cash into stocks, exchange-traded funds and other risky assets.

It soared this year as major firms, such as BNY Mellon, asset manager BlackRock Inc, credit card giant Mastercard Inc, backed cryptocurrencies, while those such as Tesla Inc Square Inc and MicroStrategy Inc invested in bitcoin.

Big U.S. banks such as Morgan Stanley are also seeking to offer wealth management clients access to bitcoin funds.