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. At this point just a couple of days into 2021, the selling price of bitcoin has crossed $US40,000.
Nothing’s brand new with the digital currency in the month since it crossed $US20,000 – there’s been no major change in how it could be used. Even though some investors are currently using the notoriously volatile currency as a “store of value,” that is traditionally a title saved for safe haven investments as gold along with other precious metals.
“Will you be ready to buy a cup of coffee with bitcoin? Most likely not with the current model of Bitcoin. It’s largely turn into a market of value,” said Mike Venuto, a co portfolio manager of the Amplify Transformational Data Sharing ETF, a $US391 million ($503 million) exchanged traded fund that focuses on blockchain technologies and firms that deal with cryptocurrencies.
Media attention to its rise has just added fuel to the rally. But investors in digital currencies as well as businesses that trade or “mine” them are warning folks to be sceptical of Bitcoin’s the latest rise and also to be braced for a great deal of volatility.
It’s been an untamed ride for bitcoin the last three years. The digital currency made its big Wall Street debut in December 2017, when the main futures exchanges rolled out bitcoin futures. The attention drove Bitcoin to about $US19,300, a then-unheard of selling price for the currency.
Well then it all 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 began in October, Bitcoin typically floated between $US5,000 as well as $US10,000.
While during the last two years companies have embraced the technology which underlies digital currencies as Bitcoin, a principle known as the blockchain, the particular uses for Bitcoin haven’t really changed since its rally three years ago. It’s nonetheless largely used by those distrustful of the banking system, criminals seeking to launder cash, and for the most part, as a store of value.
In fact, other investments usually used as safe havens throughout uncertain times – important precious metals – have been trading at near record highs also.