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Bitcoin hits record high as it soars past $28,500

Watch: Bitcoin soars to new record, 2020 rally powers on

Bitcoin continued to break new ground on Wednesday, soaring over $28,500 (£21,019).

Bitcoin rose over 5% against the dollar to hit a record high of $28,506.46 (BTC-USD) in early trade in London.

The all-time high means bitcoin has jumped by 46% since the start of December.

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In this photo illustration, the Bitcoin golden cryptocurrency commemorative coin seen displayed. (Photo by Nik Oiko / SOPA Images/Sipa USA)
The all-time high means bitcoin has jumped by 46% since the start of December.. Photo: Nik Oiko/SOPA Images/Sipa USA

For 2020, the cryptocurrency is up almost 300%, among increased interest from institutional investors, and worries over the inflationary impact of this year’s huge coronavirus-related stimulus packages.

“Bitcoin has increasingly seen demand from larger US investors, in particular, attracted by its perceived inflation-hedging qualities and the potential for quick gains, as well as expectations it would become a mainstream payments method,” according to Reuters.

Yahoo Finance UK
Chart: Yahoo Finance UK

Bitcoin’s continued rally came as the US dollar dropped to its lowest level since April 2018.

The dollar has continued to slide as investors move into riskier assets on the expectation of a strong economic recovery in 2021 as coronavirus vaccines are taken up and the global economy gets back on its feet.

READ MORE: UK first to approve AstraZeneca/Oxford COVID-19 vaccine

It is also expected that the next US administration will push for larger stimulus packages next year, once Joe Biden has replaced Donald Trump in the White House. The US COVID-19 relief package has yet to pass, but president Donald Trump’s decision to approve the $2.3tn (£1.68tn) deal sent major shares to record highs on Monday.

US politicians are currently divided on details of the stimulus bill, in particular the size of the payout cheques.

An increasing number of Republicans on Tuesday supported Trump’s demand to increase COVID-19 relief payments to US citizens from $600 to $2,000.

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