The price of bitcoin has skyrocketed to its highest level in nearly three years, with the value of the popular cryptocurrency quadrupling in size in the last eight months.
One bitcoin is currently worth nearly $US18,000 ($AU24,320), the highest it has been since the cryptocurrency peaked in late 2017 at $US19,763.
There are now hopes that bitcoin can hit more than $US20,000 by the end of the year, as it begins to enjoy more mainstream adoption and popularity.
In March this year, bitcoin plummeted to below $US4,000.
It has now increased by nearly five times, and has risen steadily over the last six months, as investors and businesses continue to back the cryptocurrency as an alternative asset during the current pandemic.
Bitcoin is also seen as an alternate currency, according to JPMorgan analyst Nikolaos Panigirtzoglou.
“The virus crisis is propagating the reassessment of bitcoin,” Panigirtzoglou told The Guardian.
“There is a reassessment about its value here as an alternative to currency; as an alternative to gold.”
Bitcoin reached its highest price ever in December 2017 at $US19,763, before dropping significantly in value.
It’s now hoped that bitcoin could break past $US20,000 by the end of the year, with eToro analyst Simon Peters saying this is a real opportunity.
“It is not out of the question for the crypto to hit its all-time high of $20,000 this side of Christmas,” Peters told The Guardian.
“Investors are using bitcoin as an inflationary hedge to combat the prospect of continued government stimulus.
“Will it be a merry Christmas for bitcoin holders? We’ll have to wait and see, but the signs look promising.”
We’ve got your back
There have been significant bitcoin developments this year, with a number of high-profile tech companies backing the cryptocurrency.
In October, worldwide payments giant PayPal announced it would soon be letting its users buy, sell and hold bitcoin, along with other cryptocurrencies.
PayPal CEO Dan Schulman said the adoption of bitcoin more widely is “inevitable”.
“It has clear advantages in terms of financial inclusion and access; efficiency, speed and resilience of the payments system; and the ability for governments to disburse funds to citizens quickly,” Schulman said.
The feature will soon be available to US customers, and will be rolled out in “select international markets” next year.
When it’s available, users will be able to use their cryptocurrency holdings to buy new products through merchants via PayPal, which will convert it into fiat currency.
“In effect, cryptocurrency simply becomes another funding source inside the PayPal digital wallet, adding enhanced utility to cryptocurrency holders, while addressing previous concerns surrounding volatility, cost and speed of cryptocurrency-based transactions,” PayPal said.
Fintech giant Square also recently threw its support behind bitcoin, buying nearly 5,000 bitcoins worth $US50 million at the time.
This purchase will already be paying off for the company, with bitcoin’s price jumping since then.
Square chief financial officer Amrita Ahuja said the company is betting on bitcoin eventually being the “ubiquitous currency”.
“As it grows in adoption, we intend to learn and participate in a disciplined way,” Ahuja said. “For a company that is building products based on a more inclusive future, this investment is a step on that journey.
“Square believes that cryptocurrency is an instrument of economic empowerment and provides a way for the world to participate in a global monetary system, which aligns with the company’s purpose.”
US authorities recently seized more than $US1 billion in bitcoins believed to be linked to the now-shut down criminal marketplace Silk Road.
