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 couple of days into 2021, the cost 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 can be used. Even though some investors are currently making use of the notoriously volatile currency as a “store of value,” that is traditionally a title saved for safe haven investments as gold along with 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 basically turn into a store of value,” said Mike Venuto, a co-portfolio director of the Amplify Transformational Data Sharing ETF, a $US391 million ($503 million) exchanged traded fund that focuses on blockchain technologies and businesses that deal with cryptocurrencies.
Media attention to the rise of its has only added fuel to the rally. But investors in digital currencies as well as businesses that trade or “mine” them are actually 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 an untamed ride for bitcoin the previous three 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 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 season Bitcoin was worth less than $US4,000 a coin. Up until this most recent rally which began in October, Bitcoin typically 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 principle called the blockchain, the particular uses for Bitcoin have not truly changed since the rally of its three years back. It’s nonetheless mostly used by those distrustful of the banking system, criminals seeking to launder cash, and for the vast majority of part, as a department store of value.
In reality, other investments usually used as safe havens throughout uncertain times – notable precious metals – have been trading at near record highs as well.