To start with it went through $US20,000. Then 10 days later, it broke through $US25,000, and then, with seldom taking a breath, it crossed $US30,000. Now 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’s been no big change in how it is generally used. Even though some investors are now using the notoriously volatile currency as a “store of value,” which is usually a title kept for safe haven investments like gold along with other precious metals.
“Will you be in a position to buy a cup of coffee with bitcoin? Probably not with the present model of Bitcoin. It’s mainly turn into 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 which focuses on blockchain technologies and firms that deal with cryptocurrencies.
Media attention to its rise has only additional fuel to the rally. But investors in digital currencies and companies that trade or “mine” them are actually warning men and women to be sceptical of Bitcoin’s the latest rise and also to be braced for a lot of volatility.
It’s been a crazy ride for bitcoin the previous three years. The digital currency made its big Wall Street debut in December 2017, when the major futures exchanges rolled out bitcoin futures. The notice drove Bitcoin to about $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 season Bitcoin was worth lower than $US4,000 a coin. Up until this most recent rally which started in October, Bitcoin generally floated between $US5,000 and $US10,000.
While within the last 2 years businesses have embraced the technology which underlies digital currencies as Bitcoin, a concept called the blockchain, the particular uses for Bitcoin have not really changed after its rally three years back. It’s still 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 throughout uncertain times – important precious metals – have been trading at near record highs also.