Why is bitcoin at $18,000?

We can all admit now that it isn’t a bubble, right?  Of course you still might think the current price is too high, as returns are a (near) random walk.

This WSJ article ably surveys the current landscape.  I put the least stock on “inflation hedge” arguments, and the most on ordinary factors such as these:

In October, PayPal Holdings Inc. PYPL 4.23% unveiled a service that allows its users to buy and sell bitcoin directly in their accounts. It became available to all U.S. users on Nov. 12 and will expand to Venmo and some international markets next year.

You don’t have to believe that PayPal per se is moving the market.  Rather the normalization of bitcoin raises the ongoing probability that it will become a normal albeit small part of various financial and corporate portfolios.  And that in turn raises its equilibrium value.  The mere continuing existence of bitcoin — illustrating that it won’t disappear anytime soon — can have a broadly similar effect.