On February 17, with the generous purchase of institutional investors and large companies, Bitcoin exceeded $50,000 for the first time, and the rising trend continued to attract small and medium-sized investors from all over the world, pushing the price of Bitcoin, the world's largest cryptocurrency, over a new milestone.
As of February 18th, the price of Bitcoin was reported at US$ 51,697, which hit a record high of US$ 52,457 earlier. So far this year, it has risen by about 73%. Ethereum also reached a record high, with a cumulative increase of about 140% so far this year.
Bitcoin rose by 170% in the fourth quarter of 2020, reaching around US$ 29,000 at the end of the year, rising to US$ 40,000 after seven trading days, and breaking through US$ 50,000 and hitting a new high in the last six weeks. After it came out more than a decade ago, bitcoin was only a few cents for several years.
Tesla announced that investing $1.5 billion in Bitcoin is the most obvious "catalyst" for the recent increase. This news made Bitcoin increase by 16% on February 8, the biggest one-day increase since the financial market turmoil caused by the COVID-19 outbreak in March last year.
After MasterCard and Bank of New York Mellon provided convenience for customers to use cryptocurrency, optimism warmed up. Morgan Stanley may include Bitcoin as a potential investment target.
It is interesting to note that Rick Rieder, head of global fixed income of BlackRock, the world's largest asset management company, said that the company has started to invest in bitcoin.
However, JPMorgan analysts threw cold water on the rise of Bitcoin. According to the research report published by the bank recently, the situation that Bitcoin broke through the $50,000 mark and reached a record high is unsustainable unless the drastic price fluctuation quickly cools down.
The bank said that the 3-month real price volatility of Bitcoin was 87%, while the volatility of gold was 16%. The total value of all bitcoins in circulation has expanded from US$ 200 billion in September to US$ 900 billion. When the market value expanded by US$ 700 billion, the funds flowing from institutional investors to major trust and futures markets totaled only US$ 11 billion. The bank also believes that the limited supply of bitcoin has led holders to charge a premium for bitcoin flowing into the market, and the influx of retail investors may have amplified the capital flow of institutions.
Bitcoin may eventually reach $1 million and become a reserve currency
Anthony Pompliano, co-founder of Morgan Creek Digital Assets, a virtual currency hedge fund, said that the bitcoin price may reach 500,000 US dollars in 2030 and eventually reach 1 million US dollars, but did not give a timetable.
He also said that Bitcoin will eventually become a global reserve currency, and its market value will eventually far exceed that of gold.
Previously, Cathie Wood, the executive officer of ARK Investment Management, known as the "Queen of the Bull Market", believed that the bitcoin price would rise to 500,000 US dollars.
Wood said that Bitcoin has achieved a considerable position in the portfolio of diversified investments. From the daily return rate of various assets in the past 10 years, the allocation ratio of Bitcoin should be between 2.55% (minimizing volatility) and 6.55% (maximizing returns); If institutional investors allocate 2.55% bitcoin, the currency price is expected to increase by 200,000 US dollars, and if the allocation ratio reaches 6.55%, the currency price will increase by 500,000 US dollars.
In addition, Sun Zhengyi, chairman of Softbank Group, said that Bitcoin will replace gold and the unit price will rise to 100,000 US dollars in 2025; Fitzpatrick, a top technical analyst at Citibank, believes that Bitcoin is expected to rise to $318,000 in 2021.
However, Nouriel Roubini, an economics professor at new york University who accurately predicted the financial tsunami in 2008 and is known as "Dr. Doom", recently bombarded Bitcoin again, saying that Bitcoin and other virtual currencies are not a currency at all, and even more bluntly, "even primitive people have a better monetary system than Bitcoin".
Roubini said in an interview on Wednesday that, fundamentally speaking, Bitcoin should not be regarded as currency, a unit of account or an expandable payment method, and it cannot be used as a stable stored value method. He believes that it is a mistake to call them virtual currency, and they are not even assets.
He said that bitcoin soared because there were a lot of manipulation, speculation, deception, falsehood and insider trading, and stressed that it was a bubble!
Peter Schiff, a well-known bear of bitcoin and regarded as a "Wall Street prophet", said that bitcoin will never become money, and there is no asset behind it to support value, and people who buy bitcoin are ultimately "fools".
Fed officials: Bitcoin does not damage the status of the dollar
Although some enterprises have indicated that they intend to accept Bitcoin as the payment method, James Bullard, president of the Federal Reserve Bank of St. Louis, believes that the increase of market interest in Bitcoin will not pose a serious threat to the US dollar as a part of the world reserve currency. In the visible range, what we see is a global economy dominated by the US dollar, which will not really affect whether the price of gold rises or falls, or whether the price of Bitcoin rises or falls.
He pointed out that before the American Civil War, it was common for banks to issue their own banknotes, using different banknotes to trade at different discounts, but people didn't like this at all. He believes that the same will happen to Bitcoin, and he believes that people don't want to use a non-uniform currency as a payment tool.
Asked whether virtual currency would pose a threat to the US dollar, Brad said that currency competition is nothing new, and it has lasted for centuries. "This is a kind of currency competition, investors want a safe haven, they want a stable value, and then use these currencies for investment".
He also said that the euro and the yen are both strong currencies, but they will not replace the US dollar. It is very difficult for a private currency that is really more like gold to play this role, so I don't think there will be any changes in the future.
Interesting post 🤓. My thoughts are that noone knows what will happen and if people believe in bitcoin being a currency then it could reach 1 million.
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