Bitcoin is nearing an all-time high
Bitcoin is nearing an all-time high

After hitting $ 19,000 for the first time in nearly three years, Bitcoin closed at its highest level in history on Tuesday.

The world's most popular cryptocurrency rose 3% to $ 18,918, near its high of $ 19,666.

Bitcoin has risen nearly 40% in November alone and around 160% this year.

The driving force behind this rally is demand for riskier assets, and the unprecedented fiscal and monetary stimulus package is set to address the economic damage from the coronavirus pandemic.

Demand for assets (as a defense against inflation and hope that cryptocurrencies will become mainstream) helps their value rise.

Bitcoin's 12-year history has been punctuated by dramatic gains and equally steep declines, and the market remains very dark compared to traditional assets like stocks or bonds.

The boom this year prompted some investors to claim that the price of the cryptocurrency could rise five times its current price, so it could reach $ 100,000 in value, which caught the attention of skeptics: It's pure. My guess. .

Jacob Skaaning of ARK36, a Cypriot regulated digital hedge fund, said the current rise in cryptocurrency prices is due to a lack of liquidity on the supply side (especially on exchanges) as demand increases. , The number of bitcoins on the trading platforms decreased.

Since the Bitcoin price hike in 2017, the cryptocurrency market has matured and attracted larger investors.

“The increased activity in the Bitcoin derivatives market means that professional and institutional investors are now buying Bitcoin,” said James Butterville, Director of Digital Assets at CoinShares.

Small cryptocurrencies (generally compatible with Bitcoin) have stopped growing after a sharp rise in recent days.

Ethereum, the second-largest cryptocurrency, slumped slightly after hitting its highest level since June 2018 on Monday, then improving its blockchain network, which will make it faster and more attractive to more users.

The third-largest cryptocurrency, XRP, rose 2% and rebounded after rising nearly 40% on Monday to its highest level in two and a half years.

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