To start with it went through $US20,000. Then ten days later, it broke through $US25,000, and then, with seldom taking a breath, it crossed $US30,000. At this point only a couple of days into 2021, the selling price of bitcoin has crossed $US40,000.
Nothing’s new with the digital currency in the month since it crossed $US20,000 – there is been no significant change in the way it might end up being used. Even though some investors now are making use of the notoriously volatile currency as a “store of value,” which is traditionally a name kept for safe haven investments as gold as well as other precious metals.
“Will you be ready to buy a cup of coffee with bitcoin? Most likely not with the present version of Bitcoin. It is largely become a store of value,” said Mike Venuto, a co-portfolio manager of the Amplify Transformational Data Sharing ETF, a $US391 million ($503 million) exchanged traded fund which focuses on blockchain technologies as well as businesses that deal with cryptocurrencies.
Media attention to the rise of its has only added fuel to the rally. But investors in digital currencies as well as firms that trade or “mine” them are warning people to be sceptical of Bitcoin’s the latest rise and also to be braced for a lot of volatility.
It has been a crazy ride for bitcoin the previous three years. The digital currency made its big Wall Street debut in December 2017, when the key futures exchanges rolled out bitcoin futures. The focus drove Bitcoin to about $US19,300, a then unheard of price for the currency.
In that case it all evaporated. The currency’s value plunged sharply in 2018, and by December of that season Bitcoin was worth under $US4,000 a coin. Up until this most recent rally which began in October, Bitcoin typically floated between $US5,000 as well as $US10,000.
While in the last 2 years businesses have embraced the technology that underlies digital currencies like Bitcoin, a concept referred to as the blockchain, the actual uses for Bitcoin have not really changed since its rally three years ago. It’s nonetheless largely used by those distrustful of the banking system, criminals seeking to launder money, and for the vast majority of part, as a store of value.
The truth is, other investments typically used as safe havens throughout uncertain times – notable precious metals – have been trading at near record highs also.