To start 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 in the month since it crossed $US20,000 – there is been no big change in the way it might end up being used. Even though some investors now are utilizing the notoriously volatile currency as a “store of value,” that is traditionally a name kept for safe haven investments as gold and other precious metals.
“Will you be able to buy a cup of coffee with bitcoin? Probably not with the present variant of Bitcoin. It’s basically turn into a store 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 as well as firms that deal with cryptocurrencies.
Media attention to the rise of its has just added fuel to the rally. But investors in digital currencies as well as businesses that trade or even “mine” them are actually warning men and women to be sceptical of Bitcoin’s the latest rise and to be braced for a great deal of volatility.
It has been a wild ride for bitcoin the previous 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 about $US19,300, a then unheard of price for the currency.
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 began in October, Bitcoin typically floated between $US5,000 and $US10,000.
While during the last 2 years companies have embraced the technology which underlies digital currencies like Bitcoin, a concept known as the blockchain, the actual uses for Bitcoin have not really changed after its rally three years ago. It’s nonetheless largely used by those distrustful of the banking system, criminals seeking to launder money, and for the majority of part, as a department store of value.
The truth is, other investments typically used as safe havens during uncertain times – important valuable metals – have been trading at near record highs at the same time.