Bitcoin, the world’s largest and most popular cryptocurrency, surged past the $40,000 plateau Thursday for the first time in its history, pushing the total value of the entire cryptocurrency market beyond $1 trillion, which also represented a historical first.
Yet, Bitcoin quickly bounced back and was trading north of $39,700 at 5 p.m. EST.
Experts believe the bull run is due in large part to increasing institutional investment in digital currency from established firms such as PayPal and Ruffer Investment Management, which purchased around $745 million in Bitcoin in November.
The ascent of cryptocurrency, and the spiking value of Bitcoin, in particular, has generated plenty of buzz among investors. Bitcoin was trading at around $10,000 in early September of 2020 and didn’t surpass the $20,000 threshold until mid-December. From there, it took off, cruising past $28,000 by Christmas weekend and crossing $30,000 for the first time on Jan. 2. The digital asset has doubled in value in less than a month and has more than quadrupled in the past year. “Bitcoin continues to defy all expectations and doubters,” Antoni Trenchev, co-founder and managing partner of Nexo, told Blomberg. In an interview with CNBC, Social Capital’s Chamath Palihapitiya said Bitcoin is “probably going to $100,000, then $150,000, then $200,000. In what period? I don’t know. [Maybe] five or ten years, but it’s going there.”
“While further growth is inevitable, investors should not expect this to move in a straight line,” Gavin Smith, chief executive officer of Panxora Group, told Reuters, adding, “The reality is that Bitcoin is far from being a magic money tree, nor is it free from downward price swings. In fact, we can expect dips as sharp as 25% at times as investors periodically withdraw profits.”
700%. That’s Bitcoin’s percentage increase since falling below $4,000 in March of last year.
Other cryptocurrencies, such as ethereum and litecoin, posted triple-digit percentage point gains in 2020 as well. Ethereum, second-largest in terms of market capitalization behind only Bitcoin, is up nearly 70% since January 1.