Bitcoin, the world's most famous cryptocurrency, has jumped above $17,000 (£12,800) to hit a three-year high.

Bitcoin on Tuesday soared to its highest level since December 2017, the digital currency has suffered plenty of wild price swings since it was launched in 2009. But investors have been flocking to cryptocurrencies during the pandemic-driven volatility on global stock markets. Some see global events such as COVID-19 and negative interest rates in traditional markets, such as Germany, as the outliers for bitcoin’s meteoric rise this year. The billionaire investor Mike Novogratz responded, saying he expected its price to first hit $20,000 before getting to $65,000 because of a "network effect" in which there were a ton of new buyers and low supply. "So YES, buy it," he said.

 

PayPal announced that its customers will be able to buy and sell Bitcoin and cryptocurrencies using their PayPal accounts, allowing customers to buy things from the 26 million sellers which accept PayPal, it said.PayPal plans to roll out buying options in the US over the next few weeks, with the full rollout due early next year. But Oanda's Mr Moya warned traders to prepare for more volatility. "The amount of hedge funds and high-frequency trading systems driving Bitcoin higher will likely deliver exaggerated moves once its price nears the $20,000 level," he added. "Traders need to expect $1,000 swings in a matter of minutes."Some believe the recent rise in Bitcoin is partly driven by the "fear of missing out" (FOMO)."Its rebound is creating more interest from speculators and so they are jumping in which then pushes it even higher," added Mr Oliver. "I think most people would put more faith in a digital currency run by their government rather than one like Bitcoin that they have trouble understanding or explaining."