To start with it went through $US20,000. Then ten days later, it broke through $US25,000, and then, with barely taking a breath, it crossed $US30,000. Now merely a few 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’s been no big change in the way it could be used. Even though some investors are currently making use of the notoriously volatile currency as a “store of value,” that is usually a title saved for safe haven investments like gold and other precious metals.
“Will you be able to buy a cup of coffee with bitcoin? Probably not with the current version of Bitcoin. It’s largely become a store of value,” said Mike Venuto, a co portfolio supervisor of the Amplify Transformational Data Sharing ETF, a $US391 million ($503 million) exchanged traded fund that focuses on blockchain technologies and companies that deal with cryptocurrencies.
Media attention to the rise of its has merely additional fuel to the rally. But investors in digital currencies and firms that trade or even “mine” them are warning people to be sceptical of Bitcoin’s the latest rise and to be braced for a great deal of volatility.
It’s been a wild ride for bitcoin the last 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 all this evaporated. The currency’s value plunged sharply in 2018, and by December of that season Bitcoin was really worth less than $US4,000 a coin. Up until this most recent rally which started in October, Bitcoin typically floated between $US5,000 and $US10,000.
While during the last two years businesses have embraced the technology which underlies digital currencies like Bitcoin, a concept known as the blockchain, the particular uses for Bitcoin haven’t really changed after the rally of its three years ago. It’s nonetheless mostly used by those distrustful of the banking system, criminals seeking to launder money, and for the majority of part, as a store of value.
In reality, other investments usually used as safe havens throughout uncertain times – important valuable metals – have been trading at near record highs at the same time.