To begin 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 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 what it is generally used. Even though some investors are currently utilizing the notoriously volatile currency as a “store of value,” which is traditionally a name conserved for safe haven investments as gold and other precious metals.
“Will you be in a position to purchase a cup of coffee with bitcoin? Most likely not with the current variant of Bitcoin. It’s 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 which focuses on blockchain technologies as well as businesses that deal with cryptocurrencies.
Media attention to the rise of its has just added fuel to the rally. But investors in digital currencies and businesses that trade or “mine” them are actually warning individuals to be sceptical of Bitcoin’s recent rise and to be braced for a great deal of volatility.
It has been a crazy ride for bitcoin the previous 3 years. The digital currency made its big Wall Street debut in December 2017, when the main futures exchanges rolled out bitcoin futures. The attention 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 season 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 in the last 2 years businesses have embraced the technology that underlies digital currencies as Bitcoin, a concept referred to as the blockchain, the actual uses for Bitcoin haven’t truly changed after its rally 3 years ago. It is still mostly used by those distrustful of the banking system, criminals seeking to launder cash, and also for the vast majority of part, as a department store of value.
In reality, other investments typically used as safe havens throughout uncertain times – important precious metals – have been trading at near record highs as well.