Bitcoin hits record high after smashing through $8,000 mark

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Bitcoin hit a new record high on Monday after smashing through the 8,000 US dollar level for the first time over the weekend, marking an almost 50 percent climb in just eight days.

The new high came after leading US payments company Square said late last week that it had started allowing select customers to buy and sell bitcoins on its Cash app.

Bitcoin traded as high as 8,197.81 US dollars on the Luxembourg-based Bitstamp exchange, up over two percent on the day and around 48 percent up since dipping to 5,555 US dollars on Nov. 12.

An eye-watering eightfold increase in the value of the volatile cryptocurrency since the start of the year has led to multiple warnings that the market is in a bubble, and institutional investors are broadly staying away.

A bitcoin coin placed on dollar banknotes is seen in this illustration picture./Reuters Photo

Retail investors, however, as well as some hedge funds and family offices, are piling into the market. The “market cap” of all cryptocurrencies hit an all-time high of over 242 billion US dollars on Monday, according to trade website Coinmarketcap.

In Zimbabwe, for instance, bitcoin has been popular for a while. After the hyperinflation crisis of 2008 and 2009, local people start to seek new ways to keep their savings and assets “safe." In this circumstance, bitcoin becomes an attractive store of value for the locals. With the increasing political turbulence in Zimbabwe, the situation has accelerated dramatically this year.

"Bitcoin had a surge in value a few years back in Zimbabwe and from what we can tell it's mostly used as a transactional device, but not so much for local payments. It's primarily for remittances,” said Lorenzo Fioramonti, professor of political economy at the University of Pretoria, in an interview of German media DW.

People queue to withdraw money from a bank in Harare, Zimbabwe's capital./Reuters Photo

"Bitcoin is better than the money we are using right now because decentralized cryptocurrencies have a decentralized nature and they have a deflationary nature,” said Shireen Ramjoo, CEO of Liquid Crypto-Money, a company that provides corporate training in Africa on various aspects of bitcoin investing.

“Our traditional currencies inflate over time but decentralized currencies like bitcoin do the opposite. They deflate over time, meaning that you will actually get more with your money."

Source(s): Reuters