To start with it went through $US20,000. Then ten days later, it broke through $US25,000, and then, with hardly taking a breath, it crossed $US30,000. At this point only 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 significant change in the way it is often used. Although some investors now are utilizing the notoriously volatile currency as a “store of value,” which is usually a title conserved for safe haven investments like gold as well as other precious metals.
“Will you be in a position to buy a cup of coffee with bitcoin? Probably not with the current version of Bitcoin. It’s largely turn into 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 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 businesses that trade or even “mine” them are actually warning men and women to be sceptical of Bitcoin’s recent rise and also to be braced for a great deal 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 main futures exchanges rolled out bitcoin futures. The focus drove Bitcoin to about $US19,300, a then unheard of cost for the currency.
Well 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 started in October, Bitcoin generally floated between $US5,000 and $US10,000.
While within the last 2 years companies have embraced the technology which underlies digital currencies as Bitcoin, a concept called the blockchain, the actual uses for Bitcoin have not truly changed since its rally three years back. It is still largely used by those distrustful of the banking system, criminals seeking to launder cash, and also for the majority of part, as a store of value.
In fact, other investments usually used as safe havens throughout uncertain times – important valuable metals – have been trading at near record highs as well.