Bitcoin tests above $14,000 after US election and move of $1bn wallet

New York — Bitcoin rose above $14,000 as investors grappled with an uncertain election outcome in the US and the movement of almost $1bn worth of bitcoin a day earlier.

The world’s largest cryptocurrency rallied as much as 3.8% on Wednesday to $14,265, its highest level since January 2018. Peer coins, including Dash and Litecoin, also advanced. The Bloomberg Galaxy Crypto Index gained more than 4% at one point.

Many crypto fans pointed to precariousness around the US presidential race, which is hanging in the balance for a second day. Any uncertainty, they argue, could benefit digital assets as investors remain on edge.

“The longer that we don’t have a president technically and the longer that we don’t have agreement among the population is positive for crypto,” said David Tawil, president of ProChain Capital. “If the courts are forced to get involved, volatility (and fear) will reign for a while. Add all this to the fact that crypto has been performing incredibly well this year — better than gold and stocks — crypto is going to gain and gain a lot of believers.”

Bitcoin has almost doubled this year as more traditional financial firms express greater interest. PayPal’s October decision to allow customers to access cryptocurrencies led the coin to spike above $13,000 for the first time in over a year. And Fidelity Investments launched a bitcoin fund over the summer.

Another factor that may be driving the price is a large movement of bitcoin, possibly from Silk Road. On Tuesday, Blockchain tracker Elliptic said almost $1bn worth of bitcoin that likely originated from Silk Road is on the move.

About  69,369 bitcoins have been moved out of a wallet that may be associated with the website, Elliptic said.

Silk Road peddled everything from drugs to murder-for-hire before being exposed  by US agents in 2013. Some bitcoins associated with the site have been sold in government auctions over the past seven years.

Whether the $1bn of bitcoin is being moved by Silk Road’s owner, law enforcement or a vendor is unclear, according to Tom Robinson, co-founder of Elliptic.

The account from which the funds moved is the world’s fourth-richest bitcoin address, according to BitInfoCharts.

“I’d say I’m about 60% confident that these funds are from the Silk Road at the moment — I’m not certain about it,” Robinson said in an e-mail.

Silk Road used bitcoins to generate the equivalent of $1.2bn in illicit sales and reap $80m in commissions in less than three years, according to court documents.

Ross William Ulbricht operated the Silk Road from January 2011 until it was shut down. “Why the sudden move of funds?” Robinson said in a Tweet today.

“A copy of the encrypted wallet file is reportedly being circulated — if someone cracked the password they could seize the bitcoins. The owner of the wallet has perhaps moved the BTC to a new wallet to prevent this.”