(Updates price, recasts top, adds charts)
By Kevin Buckland and Thyagaraju Adinarayan
TOKYO/LONDON, Jan 8 (Reuters) - Bitcoin jumped
more than 5% on Friday to fresh record highs of $41,530,
reversing losses from earlier in the session.
The world's most popular digital currency slid to as low as
$36,618.36 on Bitstamp exchange before bouncing back. Rival
cryptocurrency ethereum rose 3% after sinking more
than 10%.
Bitcoin has rallied nearly 1,000% since a low in March. It
topped $30,000 for the first time on Jan. 2, after surpassing
$20,000 on Dec. 16.
Some market participants had warned of a correction after
the $40,000 milestone was reached, but bitcoin was poised to
register it's 11th session of gains out of the last 12.
Increased demand from institutional, corporate, and more
recently retail investors has powered bitcoin's surge, attracted
by the prospect of quick gains in a world of ultra-low yields
and negative interest rates.
"We are seeing a continued demand spike driven largely by
sustained and unprecedented institutional interest, showing no
sign of abating as we move into 2021," said Frank Spiteri of
digital asset manager CoinShares.
JPMorgan strategists wrote on Jan. 5 that the digital
currency has emerged as a rival to gold and could trade as high
as $146,000 if it becomes established as a safe-haven
asset.
Interest in the world's biggest cryptocurrency soared last
year, with investors viewing bitcoin as a hedge against
inflation and an alternative to the depreciating dollar.
Bank of America investment strategists on Friday said
"violent" inflationary price action in markets helped bitcoin's
rally in the last two months.
But it warned that the cryptocurrency "blows-the-doors-off
prior bubbles", such as the dotcom bubble in the late 1990s,
China in the 2000s and gold in the 1970s.
(Reporting by Kevin Buckland and Thyagaraju Adinarayan,
additional reporting by Tom Wilson; Editing by Himani Sarkar and
Hugh Lawson)