First it went through $US20,000. Then 10 days later, it broke through $US25,000, and then, with hardly taking a breath, it crossed $US30,000. At this point just a couple of days into 2021, the 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 how it may be used. Even though some investors are now using the notoriously volatile currency as a “store of value,” that is traditionally a title conserved for safe haven investments as gold as well as other precious metals.
“Will you be able to buy a cup of coffee with bitcoin? Probably not with the current variant of Bitcoin. It is 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 the rise of its has only added fuel to the rally. But investors in digital currencies and firms that trade or “mine” them are actually warning men and women to be sceptical of Bitcoin’s recent rise and to be braced for a lot of volatility.
It has 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 notice drove Bitcoin to roughly $US19,300, a then-unheard of price for the currency.
Well then all this evaporated. The currency’s value plunged sharply in 2018, and by December of that year Bitcoin was worth lower than $US4,000 a coin. Up until this most recent rally which originated from October, Bitcoin generally floated between $US5,000 as well as $US10,000.
While within the last two years companies have embraced the technology that underlies digital currencies like Bitcoin, a concept known as the blockchain, the actual uses for Bitcoin haven’t really changed after the rally of its three years back. It is nonetheless largely used by those distrustful of the banking system, criminals seeking to launder money, and for the vast majority of part, as a department store of value.
In reality, other investments typically used as safe havens during uncertain times – important precious metals – have been trading at near record highs at the same time.