Bitcoin surged to a new record, breaking through 20,000 Wednesday and almost touching $24,000 Thursday morning. Grayscale Managing Director Michael Sonnenshein joined “Squawk Box” on Thursday to discuss. For access to live and exclusive video from CNBC subscribe to CNBC PRO:

Bitcoin breached the $20,000 level for the first time in history Wednesday, as crypto enthusiasts pointed to increased demand from institutional investors for the red-hot digital currency.

The world’s most-valuable virtual currency traded 5.6% higher to a price of around $20,600, according to market data from Coin Metrics, taking its year-to-date gains to more than 180%.

Bitcoin has been on a tear this year. Analysts say it’s gotten a boost from big-name investors such as Paul Tudor Jones and Stanley Druckenmiller moving their own assets into the cryptocurrency, while tech firms such as Square and MicroStrategy have used their own balance sheets to buy bitcoin.

“This is the domino effect as asset managers tumble their portfolios into bitcoin,” Charles Hayter, CEO of crypto market data provider CryptoCompare, told CNBC.

Bitcoin’s latest record high has reminded many market watchers of its monster rally to nearly $20,000 in 2017. That was followed by a sharp pullback the following year that saw it fall close to $3,000.

Crypto evangelists claim the 2020 rally is unlike 2017 as it’s being driven by institutional buying rather than retail speculation.

″$20,000 is undoubtedly a momentous milestone for bitcoin,” said Yoni Assia, CEO and co-founder of online investment platform eToro.

“We have seen a significant shift in the demographic of those interested and invested in crypto. No longer the domain of just computer programmers and fintech advocates.”

Wall Street jumps in

Major Wall Street firms like S&P Global and Cboe Global Markets have been making a big push into crypto market data services. S&P Dow Jones Indices recently announced plans to launch crypto indices in 2021, while Cboe has tapped New York-based trading software firm Coinroutes’ crypto market data capabilities.

On Tuesday, U.K. asset manager Ruffer updated clients about a “new allocation” to bitcoin, revealing it had around 2.5% of its portfolio invested in bitcoin.

“We see this as a small but potent insurance policy against the continuing devaluation of the world’s major currencies,” the company said.

“Bitcoin diversifies the company’s (much larger) investments in gold and inflation-linked bonds, and acts as a hedge to some of the monetary and market risks that we see.”

Ruffer managed around £20.3 billion ($27.4 billion) in assets by the end of November.

Jason Deane, an analyst at crypto advisory firm Quantum Economics, said increased institutional interest in bitcoin has “led to an increasingly bullish narrative.”

“The race is on to secure bitcoin in a market of ever-dwindling supply,” Deane told CNBC. “It’s probably not too strong to say this is institutional FOMO (fear of missing out) and those organizations who have been looking to do this now realize they will have to move fast to secure it.”

The total supply of bitcoins that will ever be “mined” is capped at 21 million. Experts say this is due to a monetary rule implemented by the cryptocurrency’s mysterious inventor, Satoshi Nakamoto.

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