Posted on Jan 7, 2021 at 9:02 pmUpdated Jan 7, 2021, 11:34 PM
How far will bitcoin go in 2021? Day after day, cryptocurrency is breaking new records. This Thursday, the digital currency crossed the $ 40,000 mark for the first time. Still subject to high volatility, the asset has doubled in value in less than a month, after increasing by more than 300% in 2020. A performance that brings the total capitalization of the cryptocurrency market to over $ 1,000 billion, another historic high.
On the first week of the year, the increase in bitcoin exceeds 30% to value the digital asset beyond 700 billion dollars. “Bitcoin continues to defy all expectations and skeptics,” said Antoni Trenchev, co-founder and managing partner of Nexo, a crypto lender. Sensitive to large variations, the price of bitcoin could continue to rollercoaster if profit taking occurs.
In a sign of euphoria, Coinbase, America’s leading retail cryptocurrency platform, said it was experiencing “connectivity issues” on both its website and mobile app for a second day. The uptrend of bitcoin is also supported by the growing interest of institutional investors.
Analysts at US bank JPMorgan recently estimated that “the use of bitcoin by traditional investors is just beginning” and compared digital and decentralized currency to gold.
A potential safe haven that must prove itself in the face of the high volatility that bitcoin is still undergoing. After jumping 11% to $ 40,394, bitcoin fell about $ 3,500 in half an hour.
The rally kicked off at the end of October with the launch of a cryptocurrency buying, selling and payment service by online payments giant PayPal. In addition to this service intended for individuals, investment funds are increasingly interested in this asset in sudden price movements, although they have long been wary of it.
“Many private investors do not yet dare to approach and remain on the sideline,” recalls Timo Enden, an analyst specializing in cryptocurrencies.
In December, the currency gained 50%, and over one year, the value of a bitcoin has climbed more than 300%. A meteoric rally for the controversial digital asset, which rebounded strongly after a severe crash in March that saw it lose 25% amid the coronavirus pandemic.