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Bitcoin (XBT) tripled in value in 2020, increasing steadily even as the stock market plunged in the early days of the pandemic. Investors were drawn to it, along with other cryptocurrencies, as the US dollar weakened.
While the Federal Reserve is expected to keep interest rates close to zero for several years, bitcoin may continue to gain new fans.
Well-known names add to the general appeal of Bitcoin. Rick Rieder, Director of Fixed Income Investments Black rock (BLK), said digital currency could replace gold. Payment giant Pay Pal (PYPL) adopted bitcoin, after showing reluctance to do so.
This isn’t the first bitcoin price spike. It had a strong run in 2017 and hit a then-record high of over $ 20,000. But its price has dropped to just over $ 3,000 at the start of 2019 as China continued its crackdown on cryptocurrency companies. It then rebounded to $ 8,000 in May 2019. It climbed past $ 20,000 in December, rising rapidly last month.
Bitcoin experts remain bullish on the currency.
“When an asset climbs this quickly for an extended period of time, I become cautious and urge anyone who trades BTC not to get caught up in the euphoria,” said Nicholas Pelecanos, chief trading officer at the crypto firm. -NEM currency, which nevertheless predicts that bitcoin could reach $ 50,000 by Valentine’s Day. “I believe we are only at the beginning of what will be a huge bull market.”
Yet even though bitcoin is becoming more and more common, the currency is still commonly used by fraudsters, which is giving it negative attention. Last July, hackers took over the Twitter accounts owned by Elon Musk, Bill Gates, and Barack Obama with the apparent goal of earning income by defrauding people from Bitcoin.
Due to the decentralized and anonymous nature of currency, it can be difficult to get money back after losing it in a scam, as there is no central authority – like a bank – to intervene. Decentralization and anonymity have made cryptocurrency a favorite for crooks, even though it appeals to technologists and investors alike.
CNN’s Paul R. La Monica contributed to this report.
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