Bitcoin (XBT) it has tripled in value during 2020, growing steadily even when the stock market fell in the early days of the pandemic. Investors have been attracted to it, as well as other cryptocurrencies, as the US dollar has weakened.
With the Federal Reserve forecasting interest rates to close to zero for a few more years, Bitcoin may continue to gain new fans.
Known names are added to the main attraction of Bitcoin. Rick Rieder, the director of fixed income investments BlackRock (BLK), has said digital currency could replace gold. Giant payment PayPal (PYPL) has adopted Bitcoin, after being reluctant to do so.
This is not the first rise in Bitcoin prices. It had a strong evolution in 2017 and reached a record high of more than $ 20,000. But its price plummeted just over $ 3,000 in early 2019, while China continued its crackdown on cryptocurrency companies. Then, it bounced back to $ 8,000 in May 2019. It rose to $ 20,000 in December, and rose rapidly last month.
Bitcoin experts remain bullish on the currency.
“When any asset goes up in price so quickly over an extended period of time, I am cautious and would ask anyone trading BTC not to get caught up in the euphoria,” said Nicholas Pelecanos, chief trading officer of cryptocurrency firm NEM, which however predicts that bitcoin could rise to $ 50,000 on Valentine’s Day. “I think we’re right at the beginning of what will be a huge bullish market.”
Although, as bitcoin is becoming the mainstream, the currency is still commonly used by scammers, giving it negative attention. Last July, hackers seized the Twitter accounts of Elon Musk, Bill Gates and Barack Obama in an apparent effort to make money by swindling people from Bitcoin.
Due to the decentralized and anonymous nature of the currency, it can be difficult to get money back after losing it in a scam, as there is no central authority (such as a bank) involved. Decentralization and anonymity have made cryptocurrency a favorite of scammers, even because it attracts both technologists and investors.
CNN’s Paul R. Monica contributed to this report.
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