Shares of Grayscale Bitcoin Trust (OTC:GBTC) jumped 17% on Monday, as the price of bitcoin leaped above $10,800.
Bitcoin's price rallied well above the key psychological threshold of $10,000, reaching prices the popular cryptocurrency hasn't hit in nearly a year. The gains come as the U.S. government pumps trillions of dollars of stimulus funds into the financial markets to ward off a deep and prolonged recession during the coronavirus pandemic.
Bitcoin has rallied along with gold in recent days; the precious metal recently hit record highs above $1,900. Gold prices tend to rise during periods of crisis and monetary stimulus, as investors seek safe-haven assets that can hold their value when the dollar weakens. Some investors believe bitcoin could eventually serve a similar function, due in part to its limited supply. Just under 21 million bitcoin tokens will ever be created.
As governments around the world print their fiat currencies at an unprecedented rate, investors are increasingly taking notice of bitcoin's intriguing supply dynamics. If more people begin to view the cryptocurrency as a means to preserve their wealth (and even grow it) as their own currencies weaken, bitcoin's price could continue to trend much higher in the days and weeks ahead.
The Grayscale Bitcoin Trust, which offers investors exposure to bitcoin without the challenges of buying and securing the cryptocurrency directly, would likely also see robust gains in such a scenario.