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Bitcoin is surging to records, a rally driven in part by the emergence of new investors from passionate individuals to return-starved hedge funds looking to profit from the digital currency’s momentum.

The cryptocurrency rose as high as $19,834.93 on Monday, according to CoinDesk, topping the previous intraday record of $19,783.21 set on Dec. 18, 2017. After trading as low as $3,867 in March, bitcoin has nearly tripled in 2020 and is up 90% since early September. It settled Friday at $18,832.76.

The move is the latest resurrection for the upstart digital currency, which is known for wild bouts of speculative fervor and equally violent crashes.

So far this year, there have been more than 11.9 million transfers of less than $1,000 of bitcoin into personal wallets, according to Chainanalysis, a software company that tracks cryptocurrency transactions. That is up from about 9.1 million in 2017 and suggests more investors are taking part in this year’s rally.

Here are some of bitcoin’s most recent winners:

Trey Harnden, 25, software salesman, Seattle

Trey Harnden says he started taking bitcoin more seriously after watching the price rally back in 2017. Since then, he has invested about a third of his portfolio, more than $3,000, in the digital currency and says he plans to buy more.

His bitcoin investment is up more than 190% this year, he says, while returns on his 401(k) and Roth IRA are nearly flat. The Seattle resident, who first heard about bitcoin from his high school English teacher, says he isn’t buying the digital currency to make a quick buck.

The endorsement of hedge-fund managers such as Paul Tudor Jones has only reaffirmed his conviction. “I don’t think the Paul Tudor Joneses of the world are going to move away from bitcoin," he said. “I am in it for the long run."

Mr. Jones told CNBC in May that he put about 1% to 2% of his assets in bitcoin, calling it a “great speculation" that he believes will emerge as a new asset class. Other prominent investors including Stanley Druckenmiller, founder of Duquesne Capital Management, and mutual fund veteran Bill Miller, now chief investment officer of Miller Value Partners, have also said they are betting big on bitcoin.

Adam Nunn, 30, insurance underwriter, Richmond, Va.

Adam Nunn’s investing focus used to be value stocks. Now it is bitcoin.

The Army veteran says he initially disregarded the digital currency. But after hearing more about it from investors he followed online, he started to buy bitcoin consistently at the start of the year. Now, his retirement portfolio is made up of just 10% stocks and 90% bitcoin.

So far that bitcoin investment is up 120%, he says, and he has added to his position over the past month, buying about half of one bitcoin for around $9,000.

“I haven’t approached it like this speculative investment. I think of it more for the long term," he said. “We’re just at the starting gate right now."

Before bitcoin, Mr. Nunn had invested in stocks such as Ulta Beauty Inc. and Micron Technologies. Now, the small percentage of Mr. Nunn’s portfolio dedicated to stocks is used mostly to trade put options, which let the owner sell a share at an agreed-upon price. All the extra proceeds from successful options bets are being funneled back into bitcoin purchases, he adds.

Hugo Rios, 19, community college student, Bayonne, N.J.

Hugo Rios says he bought $100 worth of bitcoin at the peak in 2017, not knowing much about the digital currency. He sold it soon after at a loss of more than 50%. Now Mr. Rios has returned to the market with a plan.

Three months ago, the college student started buying more than $600 in shares of the Grayscale Bitcoin Trust, along with about $300 of shares in Riot Blockchain Inc., a company that focuses on “mining" bitcoin, or running software that verifies transactions to win newly minted bitcoins. Those investments are up more than 22% and 51%, respectively, since then.

Grayscale Investments LLC is a private asset manager that offers nine over-the-counter trust funds focused on bitcoin and cryptocurrencies and another more diversified fund. Those funds, along with popular apps like Robinhood that allow investors to buy and sell bitcoin, have made the market more accessible to new players.

Mr. Rios says he has consistently been buying shares of Grayscale when the price dips, a strategy he expects to continue while buying actual bitcoin as well.

“Even though I also invest in stocks, bitcoin is the only thing I’m going long on," he said.

Marcel Rodgers, 28, police officer, Atlanta

Marcel Rodgers says he bought $100 worth of bitcoin for the first time in May using Square Inc.’s Cash App, an investment that has more than doubled since then. He first heard about the cryptocurrency years ago when hip-hop musician 50 Cent was accepting payment for his 2014 album ‘Animal Ambition’ in bitcoin.

Square’s Cash App has allowed customers to buy and sell bitcoin since 2018. In the third quarter, the app’s bitcoin revenue soared to $1.6 billion from $148 million a year earlier.

“The trick about bitcoin is that the cost of bitcoin is pretty much directly correlated to how many people accept it as a form of currency," Mr. Rodgers said. “So when people accept it as a form of currency, that’s when the money starts moving. If [Jeff] Bezos put a bitcoin button on Amazon and people were to start using it when buying on Amazon, that would drive the price of bitcoin up."

Bitcoin has been slow to catch on as a form of payment. A number of companies including Dell Inc. Microsoft Corp. and Expedia Group Inc. at one point experimented with bitcoin for payments but have since stopped.

Vera Krahmal, 41, university professor and bitcoin fund manager, London, U.K.

Vera Krahmal founded Times Three, a hedge fund that invests in bitcoin and other cryptocurrencies, with her brother Andrey Krahmal in January. She currently manages about $10 million, raised from high net worth individuals and family offices. So far, their bitcoin investments have a return of 173% this year and the fund as a whole has risen 215%.

The cryptocurrency’s volatility is a positive because it creates opportunities for trading, Ms. Krahmal said. The fund most recently bought bitcoin when its price was around $18,600. It has since risen about 1.3%.

“We’re really betting on adoption. Bitcoin has a lot of attraction as a store of value and for diversification for portfolios," she said. “We also believe that it can play an important role in protecting investments against long-term rising inflationary risks, such as loose monetary policy from central banks."

Caitlin Ostroff and Anna Hirtenstein contributed to this article

This story has been published from a wire agency feed without modifications to the text

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