Bitcoin Hit Another Record. It’s Up by a Third in a Week.

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Bitcoin spiked above $40,000 earlier Thursday and is up 36% in the first week of January to cap last year’s eye-popping gains.

The cryptocurrency has smashed expectations even as people warn about a bursting bubble. Its price is more than double the $19.783 it reached at the top of the 2017 bull run that ended in a crash, according to Coindesk.

Bitcoin failed to gain much ground earlier last year, but started to gain momentum in October, when it closed above $13,000 for the first time since January 2018.

It set an all time high of $40,123 on Thursday, up 13.5% in just 24 hours, Coindesk said. The price blew past $37,000 and then $38,000 for the first time on Wednesday.

The S&P 500, by comparison, is up a little more than 1% this year, but is also at record levels.

Bitcoin settled back a bit on Thursday afternoon, to around $38,827. Its market value—$721.9 billion—would make it one of the largest companies in the

S&P 500.

From time to time, Bitcoin watchers have offered bold predictions about its future. Some view it as a store of value like gold, while others point to its usefulness in secure transactions.

There is also somewhat of a cool factor, given its shadowy history and limited quantity. But it is extremely volatile.

Earlier this week, J.P. Morgan strategist Nikolaos Panigirtzoglou said that Bitcoin could be worth as much as $146,000, a price it could reach if its value rose to the equal the value of gold in the world not owned by central banks, in ETFs, or bars and coins.

Once considered a niche idea, Bitcoin and other cryptocurrencies have gained as big-name investors give them legitimacy. Last month, the staid insurance giant Massachusetts Mutual bought $100 million of Bitcoin even after its surge during the fall.

Popular apps like Robinhood, Square (SQ) and PayPal (PYPL) have also made buying and trading Bitcoin easier.

Economic uncertainty might also explain Bitcoin’s gains in value. The pandemic has forced an economic crisis, which will lead to more government spending and a possible spike in inflation, Coindesk said in a commentary on Thursday.

Bitcoin is considered an inflation hedge.

Write to Liz Moyer at [email protected]