As financial institutions show increasing interest, the cryptocurrency surpasses $30,000
Amid growing investor interest, Bitcoin has soared to a record high and reports that the volatile cryptocurrency is on course to becoming a mainstream payment tool.
Bitcoin began 2021 strongly by smashing through the $30,000 (£22,000) mark for the first time since quadrupling in value over the course of 2020, less than three weeks after it first traded above $20,000.
It hit a new peak of more than $34,800 on Sunday, on the 12th anniversary of the launch of the Bitcoin network.
Today is the 12th anniversary of the Bitcoin network’s founding. The rapid rise of Bitcoin has brought back memories of earlier parabolic rises and falls.
It soared from approximately $1,000 to a high of over $19,000 during 2017 before slipping below $4,000 by the end of 2018.
But this recent rally comes as some financial institutions are showing rising interest as an asset class in bitcoin, and as its backers say it is displacing gold as a store of value.
“The number continues to rise as it seems the market has never been so bullish,”The number continues to increase as it seems the market has never been so bullish. “We see a very bright future for all Bitcoin holders.”
With the U.S. dollar at its lowest level since the spring of 2018, advocates of cryptocurrencies say they defend against inflationary money printing by central banks, which introduced unprecedented stimulus initiatives last year during the Covid 19 pandemic.
“Some will argue that both gold and bitcoin have even more to offer thanks to their rarity value compared to cash, especially when governments continue to pile up debt and central banks are doing their best to fund that borrowing through the back door with quantitative easing, zero interest rates and bond yield manipulation,” said Russ Mould, investment director at U.K. AJ Bell’s investment site.
“Others will argue that neither gold nor bitcoin have intrinsic value because they don’t generate cash,” he added.
Last fall, Bitcoin got a boost from PayPal when the bank revealed that it would allow customers to purchase, sell and use the cryptocurrency.
Analysts said that by creating a scarcity as PayPal buys newly produced Bitcoins, this could push the price increase.
The miners who provide the computing power for the blockchain that tracks Bitcoin transactions have generated more than 18 million Bitcoins. The machine has a limit of 21 million coins in hardwired form.
Happy birthday #bitcoin
3rd January 2021
Sunday’s latest record high came 12 years to the day after the first entry in the Bitcoin blockchain was produced by Satoshi Nakamoto, Bitcoin’s pseudonymous founder.
That “genesis block” included a headline that read, “Chancellor on brink of second bank bailout.” from the Jan. 3, 2009 edition of The Times.
City companies have recently shown more interest in Bitcoin.
In December, in a “fragile monetary system and distorted financial market.” UK investment management firm Ruffer said it was investing £ 550m in Bitcoin as a protection against risks.
The argument for bitcoin as a financial asset has also been made by Hedge Fund investors Stanley Druckenmiller and Paul Tudor Jones.
Druckenmiller argued that it could have “broad appeal as a store of value for both millennials and the new West Coast money.”
Skeptics are alert that the crypto boom may be heading for trouble. Professor of Economics Nouriel Roubini, a longtime bitcoin critic, maintains it has no intrinsic value.
Bitcoin’s price is absolutely manipulated by a bunch of people, by a bunch of whales.
It has no basic meaning,’ Yahoo Finance told him just before Christmas. “We are close to the point where the hyperbolic bubble is going to burst.”