Thursday was another solid day for the stock market, with most major market benchmarks posting decent gains. A host of earnings reports from some up-and-coming stars in the technology sector helped to bolster investor sentiment. Some of the most successful companies helping to support the market have business models that have actually taken advantage of some of the challenges that the coronavirus pandemic and related lockdowns have created, especially those that harness the power of the internet to find alternatives for things that people aren't able to do under lockdown. The Dow Jones Industrial Average (DJINDICES:^DJI), S&P 500 (SNPINDEX:^GSPC), and Nasdaq Composite (NASDAQINDEX:^IXIC) all picked up around 1% on the day.

Today's stock market

Index

Percentage Change

Point Change

Dow

+0.89%

+211

S&P 500

+1.15%

+33

Nasdaq Composite

+1.41%

+125

Data source: Yahoo! Finance.

Interestingly, an investment that had fallen off many people's radar screen has started to come back into the limelight over the past few weeks. Bitcoin (BTC-USD) prices moved higher once again, and the cryptocurrency is now within spitting distance of the $10,000 mark. Moreover, there are a couple of factors that crypto investors believe could provide further support for bitcoin in the coming weeks.

Wall Street sign in front of New York Stock Exchange.

Image source: Getty Images.

A big rise for bitcoin

Bitcoin prices were higher by more than 6% Thursday, climbing above $9,800. Like many investments, the crypto token has had a turbulent couple of months, with its price climbing above $10,000 briefly during February only to fall below $5,000 during the coronavirus crash in early March. Bitcoin bulls have been pleased at the speed with which the token's price has recovered.

The bullish arguments for bitcoin right now are pretty straightforward:

  • The global economy has taken a huge hit from the coronavirus crisis, and investors are looking for safe havens to preserve value wherever they can find them.
  • National governments and central banks are pulling out all the stops in providing fiscal and monetary stimulus in order to support economic growth -- or at least minimize economic contraction. That includes massive increases in the size of central bank balance sheets in a manner that bitcoin proponents argue could destabilize fiat currencies like the U.S. dollar.
  • The move to more online commerce in the wake of coronavirus lockdowns highlights the convenience of digital cryptocurrency payments using bitcoin and other tokens. Some have even pointed to the health risks involved in having to handle cash, pointing to bitcoin as a safer alternative.

In addition, a technical aspect of bitcoin creation is set to have an impact on cryptocurrency mining activity in the near future. Sometime this month, the amount of bitcoin that miners receive for solving blocks of mathematical equations will fall from 12.5 to 6.25. In the past, similar events have led to price increases for the cryptocurrency.

Rising interest

Investors have only a limited number of ways to participate in bitcoin's rise. Investing in tokens directly involves jumping through some extra hoops, because you generally need to have a special wallet with a cryptocurrency exchange in order to hold bitcoin and other tokens.

Bitcoin exchange-traded funds (ETFs) have been in the works for a long time, but thus far, they haven't become available for trading. Grayscale Bitcoin Trust (OTC:GBTC) serves the same role in many ways, but it retains control over the creation of new shares. As a result, its price often trades at a premium to the value of the bitcoin it owns. For instance, today, Grayscale shares jumped 11%, outpacing bitcoin's gains and pushing the shares to a premium of more than 25%.

Bitcoin has seen huge pops and precipitous drops in its history, but some believe that the cards are stacked in the cryptocurrency's favor right now. That remains to be seen, but at least for now, bitcoin is getting a lot of positive hype from investors looking for alternatives to the stock market.