Bitcoin is trading at all-time highs, surging beyond £93,000 for the first time.
The world’s biggest cryptocurrency has doubled in value over the past 12 months – buoyed by Donald Trump’s return to the White House.
However, its 10% surge over the past week is down to one specific factor: the US government shutdown.
Experts have told Sky News that the drama unfolding in Washington is undermining trust in the dollar – and pushing investors to alternatives.
Bitwise senior associate Max Shannon said stubbornly high inflation, which erodes spending power, is another factor.
Some countries are also increasing their monetary supply – watering down the value of cash in circulation – with government borrowing on the rise.
That’s led to what’s known as a “debasement trade”, where investors pile their cash into so-called “hard” assets like Bitcoin and gold instead.
Bitcoin has a fixed supply, meaning no more than 21 million will ever exist. Almost 95% of them are already in circulation, with a small number of coins entering the market every day.
Enthusiasts argue this creates a form of scarcity that pushes prices up, as demand for BTC is considerably higher than supply.
Bitcoin’s doubled in value over the past year. Pic: CoinMarketCap
The latest figures from the Financial Conduct Authority suggest about seven million people in the UK have invested in cryptocurrencies. A single coin can be broken up into 100 million pieces, meaning many have a tiny chunk of Bitcoin in their portfolios.
But much of the current enthusiasm for Bitcoin isn’t coming…
