The rollercoaster continues for Bitcoin investors
By Ellie Pocock on Friday, 19 February 2021
About a month ago I wrote a piece about the swings in value that Bitcoin, and as a result Bitcoin investors, have been experiencing. And, the rollercoaster well and truly continues but at the moment it is only going in one direction. Up!
The price of the cryptocurrency crossed $50,000 for the first time this week, a 435% increase over the past year. And, as I write this, it is currently trading at a high of $52,845.08. Investors have been rubbing their hands together with glee, especially if they were one of the early adopters who has held tight through the many ups and downs or they bought when the price was down. Huge amounts of money have been made (but to caveat huge amounts of money have also been lost by some investors through these ups and downs).
As it seems to go from strength to strength the digital currency is undoubtedly attracting a lot of attention and more and more interest.
Last week, Tesla, the electric car maker, invested $1.5billion into Bitcoin and said it hopes to accept it as payment for its cars very soon. This saw the value increase 20% on the day it became public knowledge. We’ve seen Elon Musk’s ability to move the markets with tweets before and it’s incredible the power he holds at his fingertips. All it took was a tweet that said ‘Bitcoin is my safe word’.
He joins a list of other high-profile celebs like Jay Z and Jack Dorsey (Twitter founder) who see an opportunity in the digital currency.
But it’s not just individuals that have signalled their interest in crypto and helped fuel its recent climbs. Bank of New York Mellon, the US’s oldest bank, gave Bitcoin a boost last week when it announced it would hold, transfer and issue Bitcoin and other cryptocurrencies on behalf of its asset-management clients.
This is a huge nod towards the expected direction of travel and Wall Street’s acceptance of digital currency. It means that Bitcoin and other digital currencies will move through the same financial network which BNY Mellon uses for traditional assets like shares and bonds.
But, is it all too good to be true? The truth is it’s hard to say. Some economic commentators think not and have said there is no reason why $70,000 couldn’t be the new normal for bitcoin, if not higher. Others think that Bitcoin is a bubble which is surging due to a ‘massive amount’ of price manipulation with insiders controlling the system.
What we do know is that the financial world and regulators are watching very closely. There are calls for global regulation, but it might be a while before that kicks into action.
Your guess is as good as mine about what happens next to the value of crypto and I will keep watching from the side lines. Plus, I don’t have a spare £37,717 to join the game.