LONDON (Reuters) – Bitcoin’s price climbed to over $ 14,900 on Thursday, its highest level since January 2018, amid volatility caused by the US election and investors hope more central bank stimulus to support economies hit by the US election. COVID-19 pandemic will increase the value of digital assets.
The largest cryptocurrency has risen more than 10% since presidential election day, with Democrat Joe Biden nearing victory over President Donald Trump.
Bitcoin was last trading 5.4% higher at $ 14,930.
Technology stocks and global bond markets also extended their rally on Thursday.
“Bitcoin is the big winner of the current macro environment,” said Anthony Pompliano, co-founder and partner of cryptocurrency investment firm Morgan Creek Digital Assets. “As we have seen emerging from the 2008 liquidity crisis, inflation hedging assets are doing very well when the Fed intervenes with QE.”
The Bank of England added £ 150 billion ($ 195.20 billion) to its asset purchase program on Thursday and the Federal Reserve is expected to report later that it will do everything it can to help the US economy.
Bitcoin has experienced a recovery in the past few weeks, after digital payment company PayPal Holdings Inc PYPL.O announced it would allow virtual currency purchases on its platform.
The news reinforced long-standing expectations that bitcoin and its rivals could become a more viable form of payment, a goal that has been elusive.
REPEATED HOPES ON FURTHER PRICE INCREASES
Bitcoin investors and enthusiasts are also pinning their hopes for further price hikes on greater clarity from global financial regulators on the rules for cryptocurrencies and greater adoption by major financial firms.
“The once rejected asset is now recognized by mainstream finance,” said Dave Chapman, executive director of OSL, a Hong Kong-based cryptocurrency broker. “It’s not going away, and regulatory clarity has now been ensured by regulators, globally.”
Dizzying rallies are not uncommon in cryptocurrencies and are generally followed by equally steep crashes, with many experts failing to identify a clear cause for the changes in direction.
Bitcoin’s price soared to over $ 20,000 in December 2017 and plummeted 50% the following month.
“Bitcoin does not rise or fall for macroeconomic reasons, such as QE or real investor decisions,” said David Gerard, a cryptocurrency expert and author of the recent book on Facebook-led Libra virtual currency.
“The market is subtle and manipulated and any price changes are fully explained by internal market issues.”
Reported by Anna Irrera, edited by Timothy Heritage