Bitcoin (BTC-USD) is picking up steam once again and nearing record levels after US president Joe Biden on Thursday announced that he signed a coronavirus relief package.
Biden signed a long-awaited $1.9tn (£1.3tn) coronavirus stimulus check, which will give individual American's their third stimulus checks worth $1,400.
The world's biggest cryptocurrency was up nearly 4% trading at $56,940 (£40,904), continuing its upward swing.
While it is down from a rout in February, when it reached an all-time high of $58,350, so far, the cryptocurrency has surged over 60% last month alone, and over 92% this year.
Analysts expect "higher volatility in the stock market" in the coming weeks as a result of Biden's move, which has bolstered optimism in financial markets.
"It is highly likely that we will see another episode of stock volatility that we experienced back in December. But this time, it could be on a much larger scale," chief market analyst at AvaTrade, Naeem Aslam said. "Americans are likely to get their checks from next week."
Aslam said that "stock volatility isn't the thing that we may see; these retail traders will likely follow pretty much anything that is hyped over the internet."
"The US stimulus checks will also allow retail traders to park some portion of their funds in Bitcoin. Given that buying bitcoin has become a lot easier now, and more companies are involved in this space, we believe another massive rally is strongly on bitcoin's horizon," he added.
Milan Cutkovic, Market Analyst at Axi said that "cryptocurrencies are continuing their recovery rally too with Bitcoin approaching the $60,000 level. The recent price swings show that some investors panic easily and sell-offs are likely to occur frequently."
Paolo Ardoino, CTO at Bitfinex added: "Bitcoin has furthered its upward momentum amid relatively low trading volumes. It seems like investors may be waiting on the sidelines looking for some direction. Meanwhile, it is important to note that bitcoin is not just emerging as an asset for big institutions and corporations."
He said that there is a lot of "work going on under the hood in the bitcoin ecosystem." Adding: "Layers are being built that could well define how a multitude of payments are made by the end of this decade. Bitcoin is the foundational base layer for this ecosystem to eventually supersede the entire payments and credit card industry."
The market value of all bitcoin in circulation hit $1tn for the first time last month, data website CoinMarketCap revealed.
In February, Tesla invested $1.5bn in bitcoin, and said it may even start accepting it as payment for its products.
Tesla’s founder Elon Musk, who has often been seen tweeting about bitcoin and cryptocurrencies, has also contributed to the popularity of Bitcoin. Earlier in January, Musk sent the Bitcoin price soaring after the billionaire tagged the cryptocurrency in his Twitter (TWTR) bio.
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In December, it soared past Visa (V) making it the world’s largest financial service.
Bitcoin started 2020 at about $7,000 per coin. Despite its rise in the last year, the cryptocurrency remains extremely volatile and experts continue to remain sceptical about using it as an investment.
According to industry data, about 13% of all bitcoin in the world, some $80bn out of $600bn, belongs to just over 100 individual accounts, the Telegraph reported. The top 40% of all bitcoin, roughly $240bn, is held by just under 2,500 known accounts out of roughly 100 million overall.
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