Leading digital currency bitcoin just smashed through the $20,000 level for the first time in history. Its price has risen by more than 6% in the past day and has roughly tripled since the start of 2020. As of this writing, a single bitcoin is worth $20,617, and the total market value of all bitcoin in existence is $383.5 billion.

There are a few potential reasons bitcoin has seen a big surge in popularity in 2020. For one thing, there are lingering fears that the massive amount of economic stimulus we've seen this year could lead to inflation in the U.S. dollar, and bitcoin is seen as a naturally inflation-resistant asset since there is a finite amount.

Hand holding a gold token with bitcoin symbol.

Image source: Getty Images.

In addition, some major tech heavyweights have helped fuel interest in bitcoin this year. For example, Square (NYSE:SQ) not only ramped up bitcoin buying and selling on its Cash App, but also bought $50 million in bitcoin with its own capital for investment purposes. MicroStrategy (NASDAQ:MSTR) surprised investors by purchasing $425 million in bitcoin over the summer and recently announced a $400 million convertible bond offering to buy more of the cryptocurrency.

Most recently, PayPal Holdings (NASDAQ:PYPL) rolled out the ability for its users to buy, sell, and hold bitcoin, and has long-term plans to make bitcoin available as a payment method with its millions of merchants.

There's no telling how high bitcoin could eventually go. It depends on a few things, such as whether it achieves mainstream adoption as a payment method, or as a widely held store of value, aka "digital gold." Several experts have made the case that bitcoin could eventually command a six-figure price tag or more if things go well, so this could still be the early stages of a long-term uptrend.

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