Bitcoin reached a record high price on Monday, continuing a slow rise that began in the early stages of the pandemic. The cryptocurrency climbed to $19,850 on Monday, beating its previous high mark set in 2017, according to bitcoin index site CoinDesk.
It’s been a long road back to the high. After approaching $20,000 in December 2017, it experienced a crash that saw the value of one bitcoin plummet to just over $3,000 a year later.
The previous spike of the decentralized currency, built by an anonymous developer (or group of developers) in 2008, was driven by Asian investors, but CoinDesk suggests the current run is built on institutional investors in North America.
Square, the payments provider founded by Twitter’s Jack Dorsey, announced it had invested $50 million in Bitcoin in October. “We believe that bitcoin has the potential to be a more ubiquitous currency in the future,” Square Chief Financial Officer Amrita Ahuja said.
Organizations like PayPal are also on board. A few weeks after Square’s announcement, the online payments giant said it would begin allowing cryptocurrencies, including Bitcoin and Ethereum, to be bought, sold and held on its platform in early 2021. Some analysts see it as an alternative to gold, a store of value that can protect against inflation.
Bitcoin’s price is highly volatile, driven in large part by the buy and sell cycle, uncertainty, the news cycle, and concerns over its application. After reaching its record high Monday, the value dipped slightly and as of writing, one Bitcoin is worth around $19,600. Still, some analysts expect it will climb over the $20,000 mark during this rally and be more sustainable long-term.
It’s not all rosy highs for Bitcoin, though. Climate scientists have concerns about the electricity use required to mine Bitcoin. Mining the currency requires high levels of computing power, which solve mathematical puzzles to earn new coins. In 2018, researchers suggested an increase in the cryptocurrency’s popularity could create a demand for electricity that would generate excessive carbon emissions.