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Here's Why Bitcoin and Grayscale Bitcoin Trust Are Soaring Today

Matthew Frankel, CFP, The Motley Fool

What happened

Leading cryptocurrency bitcoin (BTC-USD) has done extremely well in 2019, a sharp contrast to its performance in 2018. So far this year, bitcoin has more than tripled, and the price has jumped by 17% over the past 24 hours alone.

As would be expected, the Grayscale Bitcoin Trust (NASDAQOTH: GBTC) is also higher as a result. The trust, which primarily owns bitcoins and allows investors to indirectly own the virtual currency, was up by nearly 16% as of 3 p.m. EDT on Wednesday.

Stacks of gold-colored coins bearing the bitcoin symbol

Image source: Getty Images.

So what

Interestingly, there's no big news item today (or yesterday for that matter) that's fueling this rally. This seems to be a continuation of renewed investor interest in bitcoin, following Facebook's (NASDAQ: FB) announcement of its own virtual currency.

The social media giant's cryptocurrency project, which has several notable partners including Uber, Mastercard, Visa, and PayPal, adds legitimacy to the idea of virtual currencies. But it isn't a direct threat to bitcoin since it will be a so-called "stable coin," pegged to the U.S. dollar.

Now what

One interesting observation is that while most cryptocurrencies are rising as well, their gains are not nearly as impressive as bitcoin's. Ethereum is up by 12% today, but other leading cryptocurrencies, such as Ripple, Bitcoin Cash, and Litecoin, are all up by single-digit percentages. So, though it's certainly fair to say that bitcoin is skyrocketing higher, this is not a broad-based cryptocurrency rally like the one we saw in late 2017.

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Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Matthew Frankel, CFP has no position in any of the stocks or cryptocurrencies mentioned. The Motley Fool owns shares of and recommends Facebook, MA, PYPL, and V. The Motley Fool recommends UBER. The Motley Fool has no position in any cryptocurrencies mentioned. The Motley Fool has a disclosure policy.