The virtual currency was up more than 170% this year amid the stock market turmoil during the pandemic. At the end of this year marked by the coronavirus pandemic, Bitcoin reached its historic record by surpassing the $ 20,000 mark (equivalent to more than $ 100,000). The virtual currency, known for its volatility, has risen more than 170% this year, amid turmoil in the stock marke
Bitcoin exceeds $ 20,000 for the first time in its history Bitcoin: understand what it is On Wednesday (16/12), Bitcoin jumped 4.5%, driven by the demand from large investors interested in its potential for quick profits.
There are also expectations that it can gain wider strength as a payment method for companies like Starbucks and Microsoft.
However, the trajectory for investors with the cryptocurrency has been unstable - it rose from $ 19,000 in November, before falling sharply. In 2017, Bitcoin came close to that $ 20,000 line. But it also hit extreme lows and dropped to less than $ 3,300.
'Very radical'
Bitcoin is widely traded as real currencies, such as the pound and the US dollar.
But it also has growing support as a form of payment with PayPal among the most recent supporters of digital currencies. PayPal announced in November that its customers will be able to buy, sell and maintain Bitcoins and cryptocurrencies using their accounts, allowing customers to buy products from 26 million sellers. However, Bank of England President Andrew Bailey warned of its use as a means of payment. "I have to be honest, it's hard to see that Bitcoin has what we tend to call intrinsic value," said Bailey in October.
It can have extrinsic value in the sense that people want it."
He said he was "very nervous" about people using Bitcoin for payments, pointing out that investors should realize that its price is extremely volatile. Roller coaster Some analysts note that the covid-19 pandemic has encouraged investors to reevaluate the long-term prospects for Bitcoin and other cryptocurrencies. But there are still concerns about fraudulent cryptocurrency trading after a succession of episodes of theft by hackers.
In times of volatility, investors tend to withdraw their money from stocks for what are considered safer investments, such as gold. Some believe that cryptocurrencies are now being seen as diversifying in the face of stock market volatility. "Periods of extreme risk aversion have forced many traders to diversify into Bitcoin," said Edward Moya of trading company Oanda.
One attraction of Bitcoin is its limited supply, which reaches 21 million. However, Shane Oliver, head of investment strategy and chief economist at AMP Capital, warns about the bitcoin rich. "Its enormous volatility hardly makes it a safe haven as a store of value.
I have much more confidence in the $ 50 bill in my wallet, maintaining its value over time, than in Bitcoin, which seems to swing like a yo-yo." Although the price of Bitcoin has risen sharply this year, its history has been marked by many ups and downs since it was created in 2010.
The founder of the consultancy firm Competitive Compliance, Yana Afanasieva, told the BBC's Asia Business Report that she expects more "ups and downs" in the coming months. When asked about a possible fall, she said: "That is the nature of cryptocurrencies, as there are some players who could try and manipulate, and no government or international body would try, in any way, to preserve the price.
