Bitcoin vaulted above US$29,000 ($38,403.20) to reach yet another record level on the last day of 2020, in a fitting end to a groundbreaking year for the world’s largest digital currency.

The cryptocurrency climbed to as high as US$29,292 before pulling back slightly to trade at US$29,023 as of 9:54 a.m. in London Thursday. It has advanced almost 50% in December, on track for its biggest monthly gain since May 2019.

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“Key to this rally is that it has been sustained over several weeks,” said Matt Long, head of distribution and prime products with crypto brokerage OSL in Hong Kong. “If we do see a break to the downside, it will be instructive on the direction of first-quarter flows whether we see institutions continue to buy on a potential dip.”

Bitcoin has now quadrupled in value this year amid the global coronavirus pandemic, while the wider Bloomberg Galaxy Crypto Index tracking the largest digital currencies is up about 280% as rival coins such as Ether have also rallied.

The latest price surge continues to divide opinion between those who view cryptocurrencies as a hedge against dollar weakness and inflation risk, and others who question Bitcoin’s validity as an asset class given its speculative nature and boom-and-bust cycles.

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“Lots of things are being validated in my view,” including Bitcoin’s role in finance and as a store of value, said Vijay Ayyar, head of business development with crypto exchange Luno in Singapore. “Bitcoin is now a real alternative.”

That said, Bitcoin’s massive December rally also has at least one technical indicator flashing red, suggesting the coin is “close to a top,” Ayyar said. The digital asset is well into overbought territory according to its relative strength indicator.

Regulatory concerns also remain a wider factor for crypto investors. The Securities and Exchange Commission this month 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.

XRP has plummeted almost 70% this month and faces further pressure with Coinbase the latest exchange to announce plans to suspend trading in the token. Coinbase also faces a proposed class-action lawsuit over the commissions the exchange collected for selling the token.

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