Bitcoin settled at its highest level ever today, Tuesday, after hitting $ 19,000 for the first time in nearly three years.
The world’s most popular cryptocurrency rose 3 percent to $ 18,918, near its record high of $ 19,666.
Bitcoin has gained nearly 40 percent in the month of November alone, and has risen nearly 160 percent this year.
The driver behind its sharp rise was demand for riskier assets amid an unprecedented fiscal and monetary stimulus designed to counter the economic damage from the Coronavirus pandemic.
The need for assets seen as resistance to inflation and expectations that cryptocurrencies will become prevalent also helped raise their value.
Bitcoin’s 12-year history is punctuated by bitter gains and equally steep declines, and its markets remain very murky compared to traditional assets, such as stocks or bonds.
Its rise this year has prompted some investors to claim that the price of the cryptocurrency may increase by five times compared to its current price, so that its value may reach $ 100,000, which attracted the attention of skeptics who say: It is purely speculative.
The current rise in the price of the digital currency has been driven by the lack of liquidity on the supply side, especially on the exchanges, said Jacob Skaaning of the Cyprus-regulated digital hedge fund ARK36, adding that the volume of Bitcoin across trading platforms has declined amid rising demand.
Cryptocurrency markets have matured since Bitcoin’s price hike in 2017, which has attracted larger investors.
James Butterfill, Director of Digital Assets at CoinShares, said: The increased activity in the Bitcoin derivative market implies that professional and institutional investors are now buying Bitcoin.
Smaller digital currencies, which often move in line with Bitcoin, have stopped rallying after surging sharply in recent days.
Ethereum, the second most important cryptocurrency, fell slightly after hitting its highest level since June 2018 on Monday, before an upgrade to its blockchain network, which is expected to make it faster and able to attract more users.
XRP, the third-most important cryptocurrency, rose 2 percent, turning positive after rising nearly 40 percent on Monday to its highest level in two and a half years.