First 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. At this point merely a few days into 2021, the price of bitcoin has crossed $US40,000.
Nothing’s brand new with the digital currency in the month since it crossed $US20,000 – there’s been no significant change in the way it is generally used. Even though some investors are now utilizing the notoriously volatile currency as a “store of value,” which is usually a name saved for safe haven investments like gold along with other precious metals.
“Will you be ready to purchase a cup of coffee with bitcoin? Most likely not with the current version of Bitcoin. It is largely become 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 businesses that deal with cryptocurrencies.
Media attention to its rise has only additional fuel to the rally. But investors in digital currencies as well as firms that trade or even “mine” them are warning men and women to be sceptical of Bitcoin’s the latest rise and to be braced for a lot of volatility.
It’s 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 focus drove Bitcoin to about $US19,300, a then unheard of selling price for the currency.
Then all this evaporated. The currency’s value plunged sharply in 2018, and by December of that year Bitcoin was really worth less than $US4,000 a coin. Up until this most recent rally which originated from October, Bitcoin generally floated between $US5,000 as well as $US10,000.
While during the last two years businesses have embraced the technology that underlies digital currencies like Bitcoin, a concept known as the blockchain, the actual uses for Bitcoin have not really changed since its rally three years ago. It is nonetheless mostly used by those distrustful of the banking system, criminals seeking to launder money, and for the vast majority of part, as a store of value.
The truth is, other investments usually used as safe havens throughout uncertain times – notable valuable metals – have been trading at near record highs also.