To begin 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 only a few days into 2021, the cost 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 the way it may be used. Even though some investors now are using the notoriously volatile currency as a “store of value,” which is traditionally a name conserved for safe haven investments as gold along with other precious metals.
“Will you be ready to purchase a cup of coffee with bitcoin? Most likely not with the present 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 which focuses on blockchain technologies and companies that deal with cryptocurrencies.
Media attention to its rise has just additional fuel to the rally. But investors in digital currencies as well as firms that trade or “mine” them are warning individuals to be sceptical of Bitcoin’s the latest rise and also to be braced for a lot of volatility.
It’s been a wild ride for bitcoin the last 3 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 roughly $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 year Bitcoin was really 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 in the last 2 years companies have embraced the technology which underlies digital currencies like Bitcoin, a concept called the blockchain, the particular uses for Bitcoin have not truly changed since the rally of its three years ago. It is nonetheless mostly used by those distrustful of the banking system, criminals seeking to launder money, and also for the most part, as a department store of value.
In fact, other investments usually used as safe havens during uncertain times – notable precious metals – have been trading at near record highs as well.