Digital currency bitcoin hit a new record high above $4000 on Saturday, boosted by strong Japanese demand. The digital currency hit an all-time high of $4,225.40 early Sunday before pulling back to trade near $4,000, according to CoinDesk, which reports news and information on digital currencies. (Also see: Bitcoin surges past $3,000)
According to commentators, the digital currency quadrupled in 2017, and is up about 40 per cent in August alone. The value of the currency is now around $64 billion, after having risen $10 billion in the last week.
According to CryptoCompare, Bitcoin trade in Japanese yen made up nearly 46 per cent of global trade volume, up from about a third a day ago. US-dollar bitcoin trade accounted for about 25 per cent while Bitcoin trade in Chinese yuan and South Korean won accounted for 12 per cent each. CryptoCompare reports live prices, charting and analysis from 65 top crypto exchanges globally.
The surge quickened pace last week, mirroring gold's climb amid a global selloff in stocks and bonds. Investors worried about the escalating stand-off between the US and North Korea have rushed to perceived safe-havens and alternative assets according to commentators.
"Bitcoin is benefitting from geopolitical tensions - trading in Japan and Korea has increased significantly over the last few months," according to Brian Kelly, a CNBC contributor and head of BKCM, which runs an digital asset strategy, CNBC reported.
A reason often cited for the rise is ICO (initial coin offering) frenzy. The amount raised recently via initial coin offerings has now topped the amount raised via early stage venture capital. Only last week Filecoin raised $180 million in a few hours.
Another reason seen as fuelling the rise is the obsession with bitcoin. One cannot watch CNBC for five minutes without seeing a trader or analyst give an opinion – which is usually very bullish as ''it's going to be the best performing investment of the year''.
According to commentators, for better or worse, statements of the kind are attracting non-technically inclined investors to bitcoin and some of whom are buying the cryptocurrency for the first time.