Menu

Bitcoin Surges Past Historic High

Plus500 | Thursday 17 December 2020

Bitcoin (BTCUSD) passed $22,000 for the first time, jumping 14.7% between yesterday morning and today’s early hour trading. This means its value has more than tripled since the beginning of 2020.

Bitcoin

A potential explanation for this new high valuation is that traders have been relying on cryptocurrencies to hedge against inflation brought on by global events and COVID lockdowns. Traditional benchmark currencies, such as the US Dollar (EUR/USD) and Pound Sterling (GBP/USD) have shown volatility this year as economies grapple with financial crises. Central banks have also increased the money supply to help their economies recover, which might speed up rates of inflation.

Bitcoin is often compared to Gold in that its valuation may rise even as other currencies fall. This, combined with the limited amount of coins that can be mined, may increase Bitcoin’s price due to demand outpacing supply.

Cryptocurrencies Become Mainstream

As 2020 comes to a close, UK and EU negotiations are showing the potential for a Brexit deal before the December 31st deadline. In addition, the US and EU are moving closer to approving a new round of financial stimulus packages. These talks have been going back and forth for months, potentially infusing uncertainty in global markets and driving people towards alternative forms of investments. 

At the same time, companies like PayPal (PYPL) and Square (SQ) are beginning to accept Bitcoin as a recognized form of payment. This has given a boost to Bitcoin, as well as to other popular cryptocurrencies, and helped them gain acceptance in a year marked by economic uncertainty and volatility. 

As stimulus talks across the US and Europe progress and the cryptocurrency becomes more widely used, it remains to be seen if Bitcoin’s value will continue to soar or if it will plummet, as it did after its previous high in 2017.


Get more from Plus500

Expand Your Knowledge

Videos & Articles help you expand your trading knowledge.

Prepare Your Trades

Our Economic calendar helps you explore global market events.

Trade Without Surprises

Understand the full costs of your trades now for better expense management later.


This information is written by Plus500 Ltd. The information is provided for general purposes only, and does not take into account any personal circumstances or objectives. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. No representation or warranty is given as to the accuracy or completeness of this information. It does not constitute financial, investment or other advice on which you can rely. Any references to past performance, historical returns, future projections, and statistical forecasts are no guarantee of future returns or future performance. Plus500 will not be held responsible for any use that may be made of this information and for any consequences that may result from such use. Hence, any person acting based on this information does so at their own discretion. The information has not been prepared in accordance with legal requirements designed to promote the independence of investment research.

Need Help?
24/7 Support