Bitcoin price hits record high for 2020 after PayPal finally adds cryptocurrency

Analysts say coronavirus pandemic has also helped cryptocurrency more than double in value since March

Bitcoin's price surged on Wednesday, 21 October, after PayPal announced cryptocurrency payments will be accepted by 26 million merchants on its network

The price of bitcoin hit a record high for 2020 on Wednesday, after PayPal announced plans to integrate cryptocurrency into its online payment platform.

Bitcoin’s price rose by more than 5 per cent following the news, taking its total gains since last week above $1,000. It is currently trading above $12,400.

PayPal said customers will be able to pay using bitcoin and other cryptocurrencies at the 26 million merchants on its network from next year.

As the world’s number one online payments platform, bitcoin’s reach will extend to its roughly 346 million customers worldwide.

“Our global reach, digital payments expertise, two-sided network, and rigorous security and compliance controls provide us with the opportunity, and the responsibility, to help facilitate the understanding, redemption and interoperability of these new instruments of exchange,” said PayPal CEO Dan Schulman.

Bitcoin remains a long way off the all-time price highs seen in late 2017, when its value briefly rose to $20,000, but the latest gains come just seven months after bitcoin was trading below $5,000.

Some analysts have attributed price gains since March to global economic uncertainty brought about by the coronavirus pandemic. 

“Ongoing - and heightening - global political, economic and social turbulence suggests that there will be a price surge before the end of the year,” Nigel Green, CEO of financial advisory firm deVere Group, told The Independent.

“Like gold, bitcoin can be expected to retain its value or even grow in value when other assets fall, therefore enabling investors to reduce their exposure to losses. Investors will increase exposure to decentralised, non-sovereign, secure digital currencies, such as bitcoin, to help shield them from the potential issues in traditional markets.

“There’s a growing sense that we’re set to experience a mini-boom similar to that seen at the end of 2017.”

Other analysts warned that bitcoin’s volatile nature means investors should remain weary of any sudden price jumps.

Simon Peters, a multi-asset analyst at online trading platform eToro, told The Independent: “Emphasis will be on how the price reacts at $12,000, given we haven't convincingly stayed above the threshold this year. Before investors look to the next bull run, we need to see the price remain above $12,000 for an extended period of time.”