The world’s most popular cryptocurrency, Bitcoin, rose 3%, reaching $18,918, which is close to the record high of $19,666. Bitcoin is up almost 40% in November alone, and about 160% this year, writes Reuters.

Its meteoric rally is fueled by demand for riskier assets amid unprecedented fiscal and monetary stimulus to counter the economic damage from the COVID-19 pandemic, a desire for inflation-resistant assets and expectations for widespread adoption of cryptocurrencies.

Throughout its 12-year history, Bitcoin has experienced a lot of ups and downs. Its market remains highly opaque compared to traditional assets such as stocks or bonds.

Due to the rapid rally of Bitcoin, some investors expect it to reach $100 thousand, however, this is highly doubtful among skeptics who are sure that such growth is a speculative number.

Analysts believe that the whole point is a reduction in supply.

“Bitcoin’s latest rally was driven by a lack of liquidity on the supply side, especially on exchanges,” said Jacob Skaaning of crypto hedge fund ARK36.

According to him, the supply of this cryptocurrency on trading platforms has decreased due to high demand for it.

Now it seems that even experienced and sophisticated investors have become believers in Bitcoin: James Butterfill of CoinShares, a digital asset manager, believes that the reason for the strong increase in Bitcoin activity is the increased interest in it from institutional investors.

Ethereum, the second-largest cryptocurrency, fell slightly after hitting its highest since June 2018 on Monday ahead of an upgrade to its blockchain network that is expected to make it faster and attract more users.

The third largest, XRP, added 2%, moving into positive territory after soaring nearly 40% on Monday to its highest level in 2 years.