Bitcoin on longest winning run since 2019 after record

Bitcoin is on track for its longest monthly winning streak in more than a year after touching a record above $28,000 over the weekend.

Bitcoin relies on so-called "mining" computers that validate blocks of transactions by competing to solve mathematical puzzles every 10 minutes (REUTERS)

The largest cryptocurrency reached an all-time high of $28,365 on Sunday before paring some of the advance, according to a composite of prices compiled by Bloomberg. The run of outsized returns over October, November and December so far is the longest such stretch since mid-2019.

“My sense is we're very close to a top -- we could hit $30,000 though,” said Vijay Ayyar, head of business development with crypto exchange Luno in Singapore. “We should definitely see a pullback, but the magnitude is probably lesser. We might only see 10% to 15% drops.”

Bitcoin has divided opinion as its price more than tripled in 2020 amid a worsening pandemic. Believers see it as a hedge against dollar weakness and the risk of faster inflation amid huge stimulus injections, and cite growing interest from institutional buyers. Others question Bitcoin's validity as an investment and point to the digital currency's history of wild rallies followed by crashes.

Regulatory scrutiny of the still-nascent cryptocurrency industry continues to be a variable for investors to consider.

The Securities and Exchange Commission last week accused Ripple Labs Inc. and its top executives of misleading investors in affiliated token XRP. While Ripple plans to challenge the accusation in the courts, the development underscores the prospect of stricter oversight of digital assets.

Ayyar said investors are shifting to Bitcoin and other digital coins in the wake of the XRP development.

Bitcoin climbed as much as 3.6% on Monday and was trading at about $27,100 as of 7:07 a.m. in London. The cryptocurrency has advanced about 279% this year, while the wider Bloomberg Galaxy Crypto Index is up 266%.

By Eric Lam