A visual representation of the digital crypto-currency Bitcoin.
Bitcoin passed the $60,000 mark for the first time on Saturday, with analysts saying the giant US stimulus package helped boost the world’s most popular virtual currency on its record-breaking run.
The cryptocurrency hit $60,197 at 1234 GMT and continued to hover around $60,000, according to the website CoinMarketCap.
Bitcoin has tripled in value over the last three months -- it was worth $20,000 in December -- bolstered by increasing backing from corporate heavyweights.
Markets.com analyst Neil Wilson said that in recent days ‘Bitcoin went up as investors looked to the imminent arrival of stimulus cheques’.
Individuals in the US earning up to $75,000 will receive a cheque for $1,400 from this weekend, after President Joe Biden signed his $1.9 trillion Covid-19 rescue plan into law this week.
Bitcoin has been on a meteoric rise since March last year, when it stood at $5,000, spurred by online payments giant PayPal saying it would allow account holders to use cryptocurrency.
Last month Elon Musk’s electric carmaker Tesla invested $1.5 billion in the virtual unit, while Twitter chief Jack Dorsey and rap mogul Jay-Z said they are creating a fund aimed at making Bitcoin “the internet’s currency”.
Others jumping on the bandwagon include Wall Street player BNY Mellon, investment fund giant BlackRock and credit card titan Mastercard.
Bitcoin, which was launched back in 2009, hit the headlines in 2017 after soaring from less than $1,000 in January to almost $20,000 in December of the same year.
The virtual bubble then burst in subsequent days, with bitcoin’s value fluctuating wildly before sinking below $5,000 by October 2018.
However the last year’s rise has been more steady, with investors and Wall Street finance giants wooed by dizzying growth, the opportunity for profit and asset diversification, and a safe store of value to guard against inflation.
Bitcoins are traded via a decentralised registry system known as a blockchain.
The system requires massive computer processing power in order to manage and implement transactions.
That power is provided by “miners”, who do so in the hope they will receive new bitcoins for validating transaction data.
Last month, Bitcoin hit a market capitalisation of $1 trillion as it rose to yet another record high.
countering analyst warnings that it is an “economic side show” and a poor hedge against a fall in stock prices. The world’s most popular cryptocurrency jumped to then an all-time high of $56,399.99 on February 21, posting a weekly gain of 14%. All digital coins combined have a market cap of around $1.7 trillion.
Separately, Americans will see the first direct deposits from President Joe Biden’s $1.9 trillion COVID-19 relief package hit their bank accounts this weekend, Treasury and Internal Revenue Service officials said on Friday.
A first tranche of $1,400 stimulus payments was processed on Friday, with additional large batches of payments to be sent via direct deposits or through the mail as checks or debit cards in coming weeks, the officials said.
That means a family of four earning up to $150,000 will receive $5,600. Unlike the first two payments, which were limited to children under 17, this round of checks will also go to all qualifying dependents, including college students, adults with disabilities, parents and grandparents, the officials said.
The Biden administration said stimulus payments and other measures will boost economic growth and help Americans hit by the COVID-19 pandemic, which is continuing to claim 1,400 lives in the United States each day.
Nearly 160 million US households will receive some $400 billion in direct payments of $1,400 per person, helping individuals earning up to $75,000 annually and couples up to $150,000.
The U.S. economy will grow faster than previously thought and reach pre-COVID-19 levels within six months, according to a majority of economists polled by Reuters who however said unemployment would take well over a year to recover.
Optimism was largely driven by the House of Representatives passing President Joe Biden’s $1.9 trillion relief aid in response to the pandemic, which has killed around 530,000 people in the US and left millions out of work.
After shrinking 3.5% last year, the world’s largest economy was forecast to grow 5.7% this year - the highest since polling began for this period over two years ago, according to the March 8-11 survey of over 100 economists.
In response to an additional question, 85% of economists, or 51 of 60, said the economy would reach pre-COVID-19 levels within a year, including more than 60% expecting it within six months. “With the vaccination roll-out going well and President Biden indicating all adults will have the opportunity of a vaccine by the end of May we expect a broad re-opening of the economy through the second quarter,” said James Knightley, chief international economist at ING.
“With more stimulus coming and plenty of pent-up demand and strong savings levels to fuel it, we see a strong likelihood that all the lost output will have been regained by the end of Q2.”