The US government shutdown id driving the increase, a crypto fund operator says. Photo: CFOTO / NurPhoto via AFP
New Zealanders are trading hundreds of millions of dollars worth of bitcoin each month as the price hits record levels.
The bitcoin price has reached a new high, of more than NZ$212,000.
Paul Quickenden, chief commercial officer at Easy Crypto said the total crypto market in New Zealand was worth $700 million to $800m per month and Bitcoin was 40 percent to 50 percent of that.
Rupert Carlyon, founder of Koura, which operates a crypto fund, said the US government shutdown was driving the increase.
"People are nervous about the US government and its inability to control its spending and the implications that this has for US currency and inflation. At a minimum, the deficits will be inflationary which theoretically should result in a falling US Dollar.
"Over the past six weeks we have seen gold jump from about US$3300 per ounce up to US$3900 per ounce. Bitcoin is seen as the digital gold so is following the same path. It's just been a bit slower to get there."
He said there were reasons why the value could keep increasing.
"Nasdaq keeps on climbing and it does feel as though there is lots of positivity out there. At the same time I don't see the US shutdown ending any time soon so investors will get increasingly concerned about the US debt and currency position.
"On Friday there was about $618m of funds flowing into the US based Bitcoin ETFs capping a week where $US2b was invested into them putting it into the top five weeks of the last 12 months - this shows we currently have really strong momentum.
"Though one thing we do know is that Bitcoin can throw curve balls and momentum can shift very quickly. That is the problem when you have an asset like Bitcoin with low levels of liquidity - prices and momentum can shift very quickly from positive to negative."
Quickenden said an increase in global liquidity and central bank easing were all good for risk assets such as bitcoin.
"When we look ahead, many investors are predicting a decent Q4 on the horizon for Bitcoin's price. It is also true that we're in a slightly different cycle to the prior four-year cycles due to increasing institutional demand and a changing regulatory cycle."
Sharesies is expecting to launch Sharesies Crypto this month.
A beta version opened to a group of people on its waitlist on Monday.
A spokesperson said about 30,000 people had registered interest.
