The price of bitcoin surged above $15,000 on Thursday, its highest level since January 2018, as the U.S. waits on results from the presidential election.
The price of the cryptocurrency, the world’s largest, is up more than 10% since Tuesday and has more than doubled year-to-date.
Central banks from the Bank of England to the U.S. Federal Reserve have signaled a willingness to provide stimulus to support economies hit by the COVID-19 pandemic, spurring interest in cryptocurrencies.
“Bitcoin’s creation was in part due to fears that increased fiscal stimulus is devaluing currencies globally,” Simon Peters, a cryptoasset analyst at investment platform eToro, said. “As a result, when central banks announce extensive plans to pump money into economies, many investors in the crypto community take this as a major bitcoin buy signal.”
Investors also hope global financial regulators will clarify rules on digital currencies that encourage greater adoption. Last month, PayPal announced it would begin allowing account holders in the U.S. to use cryptocurrencies bitcoin, ethereum, bitcoin cash, and litecoin directly within the PayPal digital wallet. It said it would expand the feature 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 bitcoin price moves are not connected to central bank moves or inflation risk.
“Bitcoin doesn’t go up or down for macroeconomic reasons, like QE or real investor decisions,” David Gerard, a cryptocurrency expert who wrote a recent book on Libra. “The market is thin and manipulated, and every price change is fully explained by internal market issues.”
In December 2017, Bitcoin jumped to more than $20,000 before falling by 50% the next month.