Has Bitcoin Had Its Day?

Jan. 13, 2021

Since its inception in 2008, Bitcoin and other cryptocurrencies have had a volatile trading history and valuation. Which is why investors are always striving to understand what cryptocurrencies are and the best strategies to adapt to take advantage of them.

While the value of Bitcoin has fluctuated, 2020 has been a very positive year for the cryptocurrency. The price of Bitcoin has broken through $19,000 for the first time in almost three years while cryptocurrency endorsements from big-name investors such as Tesla’s Elon Musk have also helped propel values higher. Despite these positive signs, naysayers will still claim that Bitcoin has had its day. Are they right or are they missing out on potentially lucrative investment opportunities within this fast-moving digital space? Let’s find out more on the highs and the lows of the cryptocurrency.

• What is Bitcoin?

To start with, let’s go right back to the beginning of Bitcoin’s journey to find out more about its origins. Bitcoin is the most famous cryptocurrency, an online-based currency designed to be only used within the digital space.

But Bitcoin is not alone. There are thought to be 3,000 other cryptocurrencies out there. While they are ostensibly different, they are all united by how no central authority is in charge or acts as a regulator. The combination of technology such as blockchain and keys makes it possible for two parties to trade cryptocurrency without needing any trusted authority to oversee the process.

• Bitcoin’s highs and lows

The journey of Bitcoin has been characterised by ups and downs. From its beginnings, its value rose steadily until it experienced a real surge in 2017. In December 2017, the value reached a record high of $20,000 after starting the year at $966. However, within a week the digital currency lost more than a quarter of its value. It’s this kind of volatility which means many traditional investors have their doubts about committing to Bitcoin investment opportunities. 

• Why Bitcoin is now worth investing in

However, Bitcoin has recently seen another similar surge suggesting that it’s being treated more seriously by the investment community.

This month the price of Bitcoin broke through $19,000 for the first time in almost three years, taking the world’s biggest cryptocurrency close to its all-time high of just under $20,000. Bitcoin has surged by almost 40% in November and is up about 160% this year.

Many believe this is indicative of long-term growth. At the same time, the market has also been buoyed by endorsements from respected investors. The US billionaire Paul Tudor Jones - the man behind Tudor Investment Corp - is among many hedge fund and money managers who have recently revealed they have invested in Bitcoin. According to numerous analysts, Bitcoin is being seen as a safe asset during times of economic and political uncertainty.

PayPal has also announced plans to make Bitcoin available to its 346 million customers across the globe from early 2021, emphasising how its increasingly entering the mainstream. Even with more fluctuations in value, this evidence suggests how Bitcoin’s day could still be to come...