Bitcoin, the world’s largest cryptocurrency, soared past the $30,000 mark Saturday morning for the first time in its history and climbed as high as $33,000, before slipping back below $32,000 by late Saturday afternoon, as the digital asset continues on an extraordinary upward ascension.
Bitcoin’s capitalization is above $570 billion.
“History has a warning for people buying at the new all-time-high,” financial author Glen Goodman told Forbes via email last month. “While I’m optimistic about the long-term prospects for bitcoin, four years ago we had a very similar situation with bitcoin breaking new ground, but just two weeks later its price plummeted by more than a third.”
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Nicholas Pelecanos, head of trading at cryptocurrency firm NEM, has predicted that Bitcoin could rise to $50,000 by Valentine’s Day. In mid-December, Scott Minerd, chief investment officer of Guggenheim Investments, told Bloomberg that Bitcoin “should eventually climb to about $400,000.”
Other cryptocurrencies, such as ethereum and litecoin, have posted triple-digit percentage point gains in 2020 as well. One of the critical factors in their bull run has been increasing institutional investment in the digital currency from established firms. In November, British fund manager Ruffer Investment Management, which controls more than $27 billion in assets, purchased around $745 million in Bitcoin. The month prior, Paypal said it would allow customers to buy, hold and sell cryptocurrency directly from their PayPal accounts. In December, Massachusetts Mutual Life Insurance Company purchased $100 million worth of the cryptocurrency for its general investment account. “As we come to the end of what has been an iconic year for bitcoin, I can only see more positive growth in 2021,” the chief executive of bitcoin and cryptocurrency exchange CoinCorner Danny Scott told Forbes last month. Yet, according to Fortune, Bitcoin “has a long history of volatility” and “most observers expect some retrenchment” of this rally “sooner or later.” Bitcoin’s first major price spike occurred in 2017, climbing to around $20,000 per bitcoin, but then lost more than 80% of its value over the following 12 months.