To begin with it went through $US20,000. Then 10 days later, it broke through $US25,000, and then, with rarely taking a breath, it crossed $US30,000. Now just a few days into 2021, the selling price of bitcoin has crossed $US40,000.
Nothing’s new with the digital currency of the month since it crossed $US20,000 – there’s been no big change in what it is generally used. Although some investors are now making use of the notoriously volatile currency as a “store of value,” that is usually a title kept for safe haven investments as 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 version of Bitcoin. It is basically become 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 which focuses on blockchain technologies and companies that deal with cryptocurrencies.
Media attention to its rise has just extra fuel to the rally. But investors in digital currencies as well as companies that trade or “mine” them are warning men and women to be sceptical of Bitcoin’s the latest rise as well as to be braced for a lot of volatility.
It’s been an untamed ride for bitcoin the last 3 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 roughly $US19,300, a then-unheard of cost for the currency.
Well then it all evaporated. The currency’s value plunged sharply in 2018, and by December of that year Bitcoin was worth under $US4,000 a coin. Up until this most recent rally which originated from October, Bitcoin generally floated between $US5,000 and $US10,000.
While during the last 2 years businesses have embraced the technology that underlies digital currencies like Bitcoin, a concept known as the blockchain, the particular uses for Bitcoin have not really changed since its rally three years ago. It’s still largely used by those distrustful of the banking system, criminals seeking to launder money, and for the most part, as a store of value.
In reality, other investments usually used as safe havens during uncertain times – notable precious metals – have been trading at near record highs also.
