Bitcoin breaks above $16,000

Leading crypto may be benefiting from US election uncertainty, as it surges past the $16,000 mark for the first time since January 2018

Bitcoin has broken above $16,000 for the first time since January 2018, in what has proved to be one of the most eventful months for the world’s leading cryptocurrency.

Macroeconomic factors have fuelled Bitcoin’s resurgence after it plunged towards $5,000 at the height of the Covid-19 market sell-off in March. With coronavirus uncertainty besetting the global economy, however, many were attracted to it as a potential store of value. Its deflationary nature also proved appealing to those concerned by the fact that more than 22 per cent of all the US dollars in existence were created in 2020 alone.

The growing acceptance of Bitcoin by institutional investors and corporations, such as PayPal, skyrocketed the digital currency to multiyear highs.

While the cause for the jump above $16,000 is not absolutely clear, some have attributed it to the continued uncertainty surrounding the US presidential elections. Although the Democratic candidate Joe Biden has been declared the victor in the worldwide media, and has even begun conversations with other world leaders, the election has not officially ended.

President Donald Trump has launched several legal challenges in a number of disputed battleground states and made numerous allegations of voter fraud; elsewhere, Georgia’s Secretary of State has announced the southern state will be carrying out a full hand recount of its presidential election votes after the result remained too close to call. The potentially outgoing President has hailed the decision as an important “first step”.

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With the identity of the leader of the world’s largest economy still unclear more than a week after election day, by mid-afternoon Bitcoin was trading up 2 per cent at $16,156.20, up 40 per cent in the past month.

 

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