Bitcoin has been on a tear in 2020, more than doubling in value year-to-date. Its meteoric rise comes on the back of unprecedented stimulus from global governments and central banks during the coronavirus pandemic, which some industry insiders believe has made the virtual currency more attractive than fiat currencies like the dollar.
Investors are awaiting the latest monetary policy announcement from the Federal Reserve, with the U.S. central bank expected to keep overnight rates close to zero and reiterate the need for more fiscal stimulus. But lingering uncertainty over the outcome of the 2020 U.S. presidential election means that it’s unlikely another coronavirus stimulus package will be agreed upon in the near term.
Meanwhile, analysts have cheered moves from the likes of PayPal and Facebook in the cryptocurrency space lately. PayPal said it would let its customers buy and sell digital assets like bitcoin and ether through its digital wallet and eventually use them for shopping, while Facebook is developing its libra digital currency with a Switzerland-based consortium called the Libra Association.
Still, regulators continue to scrutinize the cryptocurrency industry. Bitcoin’s network doesn’t require a central authority to maintain it, and officials have expressed concern with its use in illicit transactions. On Thursday, the U.S. Department of Justice said it had seized $1 billion worth of bitcoin believed to be linked to Silk Road, the now-defunct online black market.