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Bitcoin continued its search for records over Christmas. At times, the cryptocurrency surpassed the $ 28,000 mark and is now targeting the next high.
Just days after jumping over $ 20,000, Bitcoin is already targeting the next threshold. The oldest and most important cyber currency hit a record high of around $ 28,378 on Sunday on the Bitstamp trading platform. Bitcoin is now heading towards the next psychological hurdle of $ 30,000, said Emden Research analyst Timo Emden.
Initially, the coin was unable to hold Sunday’s level on Monday. More recently, however, the price was still just under $ 27,000 and thus significantly above Saturday’s closing price. In other trading venues, of which there are numerous, all-time highs may deviate as there are no core Bitcoin operations.
“Fear of getting lost”
“The rally is currently being driven by private investors who have stocked up on digital buyers over the Christmas holidays because traditional markets had closed their doors,” Emden explained.
On the long weekend of Christmas alone, the price of the most famous cryptocurrency went up around $ 4,000. At least now, the mood is being driven primarily by the “fear of missing out” syndrome, according to the analyst.
A not insignificant part of investors are simply afraid of missing something. Since the end of November, the coin has risen more than $ 7,000, an increase of about 37 percent.
Possible price drop
The development is also huge during the year. Starting at around $ 8,000, the price initially fell to less than $ 4,000 during the first Corona wave in the spring. After that, a slow climb began, which accelerated sharply on the fall.
However, experts repeatedly warn about the risks of Bitcoin, which is prone to fluctuations. By the end of November, for example, he had lost more than $ 3,000 in 24 hours. Rapid price gains would increasingly attract less experienced speculators and investors, who could sooner or later throw in the towel, Emden also emphasized. There are no states or central banks behind the cyber motto. Supply and demand alone determine the course.
With a share of around 70 percent, Bitcoin is by far the largest digital currency. The market capitalization of the market is a calculation from the Coinmarketcap.com provider that is currently hovering around $ 500 billion. All digital currencies together add up to just over $ 700 billion.
Investors seek alternatives
There are many reasons for the increase in the price of Bitcoin this year. It is crucial that the topic of digital currencies has returned to focus more on investors. This is no less a consequence of an advance of the great payment service PayPal, which wants to allow its customers to pay in digital currencies such as Bitcoin.
The motto is also reinforced by the fact that more and more professional investors are interested in cryptocurrencies. More recently, for example, Guggenheim Partners jumped on the bandwagon: an American wealth manager investing nearly $ 300 billion for investors around the world. Discussions about regulated electronic currencies also play an important role.
Interest in digital currencies is spiked by the corona pandemic and the associated sharp rise in national debt. For this reason, some investors fear an increase in inflation in the medium and long term, against which they want to protect themselves with alternative investments.
Digital currencies can be “mined” by providing computing power on the blockchain. The code incorporates some form of inflation protection. There is a fixed upper limit of 21 million units. The specified amount of Bitcoin is automatically halved at regular intervals, the last time in May.
