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Bitcoin’s price soared above $ 15,000 on Thursday, its highest level since January 2018, as the US awaits presidential election results.
The price of the cryptocurrency, the largest in the world, has risen by more than 10% since Tuesday and has more than doubled since the beginning of the year.
Central banks, from the Bank of England to the US Federal Reserve, have signaled their willingness to provide stimulus to support the economies affected by the COVID-19 pandemic, stimulating interest in cryptocurrencies.
“The creation of Bitcoin was partly due to fears that the increased fiscal stimulus is devaluing currencies globally,” said Simon Peters, a cryptocurrency analyst at the investment platform eToro. “Consequently, when central banks announce sweeping plans to pump money into economies, many investors in the crypto community see it as an important signal to buy bitcoin.”
Investors are also hoping that global financial regulators will clarify rules on digital currencies that encourage greater adoption. Last month, PayPal announced that it would begin allowing account holders in the United States to use bitcoin, ethereum, bitcoin cash, and litecoin cryptocurrencies directly within the PayPal digital wallet. It said it will expand the functionality to Venmo and some international markets in the first half of 2021. Meanwhile, Facebook is developing its own digital currency with a Swiss consortium.
Some observers say that bitcoin price movements are unrelated to central bank movements or inflation risk.
“Bitcoin does not rise or fall for macroeconomic reasons, such as QE or real investor decisions,” David Gerard, a cryptocurrency expert who wrote a recent book on Libra. “The market is subtle and manipulated and any price changes are fully explained by internal market issues.”
In December 2017, Bitcoin jumped to over $ 20,000 before dropping 50% the following month.
