Bitcoin rose to more than $ 17,000 on Tuesday, its highest level in three years, after previous highs in recent weeks.
Bitcoin has increased by more than 4 percent in the past 24 hours, trading at $ 17,030, and reaching its highest point since January 7, 2018, according to CoinDesk data.
Investors hope that more US central bank stimulus to support economies affected by the COVID-19 pandemic will lead to an increase in the value of digital assets.
Industry insiders say: The rise of Bitcoin during the current year – which has seen a 137% rise since the start of the year – is due to a number of factors, including: the government stimulus wave associated with the emerging coronavirus COVID-19, and interest from popular investors, such as : Paul Tudor Jones and Stanley Druckenmiller.
“The gap between the crypto world and traditional financial institutions has been largely closed,” said Charles Hayter, chief executive of crypto market data provider CryptoCompare, to CNBC.
Cryptocurrency enthusiasts describe bitcoin as having similar traits to safe-haven assets like gold, which investors often flock to in times of economic turmoil. They claim that the fiscal and monetary stimulus measures taken in response to the epidemic reduce the attractiveness of sovereign currencies, such as the US dollar.
Bitcoin has been on the rise over the past few weeks, after digital payments company PayPal announced that it would enable purchases using virtual currencies on its platform.
The news reinforced long-term expectations that Bitcoin and its competitors could become a more viable method of payment, a goal that had previously been elusive.
Bitcoin investors and enthusiasts are also pinning their price hike hopes on more clarity from global financial regulators on the rules for cryptocurrencies, and increased adoption by major finance companies.
It is noteworthy that a sharp improvement is not common in cryptocurrencies, and is usually followed by a steep decline, and this is accompanied by the presence of many experts who are at a loss to determine a clear reason for the change of trend.
The price of Bitcoin rose to more than $ 20,000 in December 2017, then fell by 50 percent the following month.
“Bitcoin does not rise or fall for macroeconomic reasons, such as quantitative easing or real investor decisions,” David Gerrard – a cryptocurrency expert and author of a book on the virtual currency (Libra) led by Facebook – said earlier. He added, “The market is weak and manipulated, and every price change is fully explained by internal market problems.”