To begin with it went through $US20,000. Then 10 days later, it broke through $US25,000, and then, with barely taking a breath, it crossed $US30,000. At this point only a couple of days into 2021, the selling price of bitcoin has crossed $US40,000.
Nothing’s brand new with the digital currency of the month since it crossed $US20,000 – there’s been no major change in the way it is often used. Even though some investors now are using the notoriously volatile currency as a “store of value,” that is traditionally a title kept for safe haven investments as gold and other precious metals.
“Will you be able to buy a cup of coffee with bitcoin? Most likely not with the current variant of Bitcoin. It is largely 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 that focuses on blockchain technologies and firms that deal with cryptocurrencies.
Media attention to its rise has merely added fuel to the rally. But investors in digital currencies as well as firms that trade or even “mine” them are actually warning individuals to be sceptical of Bitcoin’s recent rise and also to be braced for a lot of volatility.
It’s been a crazy ride for bitcoin the previous 3 years. The digital currency made its big Wall Street debut in December 2017, when the key futures exchanges rolled out bitcoin futures. The attention 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 season Bitcoin was really worth less than $US4,000 a coin. Up until this most recent rally which started in October, Bitcoin typically floated between $US5,000 as well as $US10,000.
While within the last two years companies have embraced the technology that underlies digital currencies as Bitcoin, a concept called the blockchain, the actual uses for Bitcoin have not truly changed since its rally three years ago. It’s still largely used by those distrustful of the banking system, criminals seeking to launder cash, and for the majority of part, as a store of value.
In reality, other investments usually used as safe havens during uncertain times – important valuable metals – have been trading at near record highs at the same time.