The value of the entire crypto market also surged, surpassing $1 trillion again as a result of the rallies in multiple tokens. The event is set for later this month which should make the cryptocurrency far more efficient when it transforms from proof-of-work to proof-of-stake. Other cryptocurrency prices also climbed, including ether, which rose more than 4% leading up to the merge. The cryptocurrency has been range-bound between about $18,000 and $24,000 since June, but it hasn’t seen $21,000 in a few weeks. The bitcoin price tumbled below $19,000 earlier this week, its lowest level since the middle of June, but it topped $21,000 after a swift rise on Friday. The dollar has gotten remarkably strong this year, so even a slight weakness has been enough to trigger big moves in other assets, including cryptocurrency. dollar is being credited with the bounce in bitcoin prices. What Drove the Rally?Ī very slight weakening of the U.S.
The question now is whether the rally has real staying power - or is just another dead cat bounce. Before Wall Street ended its trading session, bitcoin had topped $21,000 as well. Please consult our website policy prior to making financial decisions.īitcoin topped the psychological level of $20,000 on Friday, rising alongside tech stocks as represented by the Nasdaq Composite, which rose 2% compared to bitcoin‘s roughly 10% jump. Or it could end up being… er, rat poison, as Warren Buffett’s right-hand man Charlie Munger once put it.Neither the author, Michelle Jones, nor this website, The Tokenist, provide financial advice. It could well be digital gold, a currency or a speculative asset. It seems only time will tell which clothes Bitcoin will end up wearing. So it appears that opinions on just what Bitcoin can (or should) be used for do differ wildly around the world.
Gold is seen as the ultimate safe haven, with a multi-millennia track record of preserving wealth… Despite the hype, cryptocurrencies remain a market characterised by enormous volatility, and have so far failed to act as safe haven asset in the traditional sense over the last 10 years. The report also quoted the manager of listed products and investment research at the Perth Mint, Jordan Eliseo. “Blockchain technology is pretty cool and could have interesting and widespread applications in the future, but quite simply, it’s volatile,” he said. He pointed out that Bitcoin crashed by 10% just as it was legalised. But in contrast, he sees cryptocurrencies like Bitcoin as nothing of the sort, noting their “extreme deviations and “lack of pedigree”.īouris also pointed to the recent legalisation of Bitcoin as legal tender in the Central American country of El Salvador. Mr Bouris told the Australian that gold “has shown a consistent trajectory over the past few decades, and as a physical asset it tends to hold its value”. According to a report in The Australian today, he has a rather strong opinion on the idea of Bitcoin as digital gold. Mark Bouris is chair of the financial services group Yellow Brick Road. So is Bitcoin really the 21st century’s answer to gold? A decidedly medieval investment by comparison? And it can be used in a similar way with a consistent value anywhere on the planet.
Governments have little control over Bitcoin. Because of this scarcity, many investors often claim that Bitcoin has the same inbuilt protections against monetary debasements like inflation or deflation.īitcoin is also often touted as an alternative to gold because of its decentralised nature and fungibility. And there are only 21 million Bitcoins that can ever be mined. So gold and Bitcoin do have some similarities. After all, gold has been mined, collected and stored as an investment or store of value of thousands of years of human history. Some investors even call Bitcoin ‘digital gold’, an alternative to the yellow metal for a modern world. Ever since the cryptocurrency Bitcoin ( CRYPTO: BTC) exploded onto the mainstream investing consciousness, it has been compared to gold.
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