Bitcoin soaring continues – price approaches $ 35,000 mark


The digital currency Bitcoin continued to soar at the beginning of the year. On Sunday, the Bitcoin price on the Luxembourg trading platform Bitstamp rose to $ 34,800. Bitcoin could not quite maintain the level, but was recently around five percent above the level of late trading on Saturday evening at $ 33,900. This adds up to the price gains in the new year alone to around $ 5,000 or 17 percent. On other trading venues, of which there are numerous, the record levels can deviate as there is no central Bitcoin trading.

Started at around $ 8,000 at the beginning of 2020, the rate initially fell to less than $ 4,000 during the first Corona wave in spring. Then began a slow increase that accelerated sharply in the fall. Since the end of September, the price has climbed by more than $ 23,000 or around 220 percent.

Bitcoin is the oldest and best known digital currency. Experts had recently estimated the market capitalization to be around $ 600 billion. There is no suitable reason for the rise in Bitcoin to the current record high shortly after the turn of the year. On the market, however, it is repeatedly stated that the digital currency has recently moved more into the focus of large financial investors and is in greater demand.

Above all, the announcement of the payment service PayPal that it would allow its customers in the USA to pay with Bitcoins resulted in an enormous surge in demand. Interest in digital currencies is also being increased by the corona pandemic and the associated sharp rise in national debt. For this reason, some investors fear rising inflation in the medium to long term, which they want to hedge against with alternative investments.

However, experts warn of the extreme price fluctuations in Bitcoin. Three years ago, the rate of the digital currency collapsed by around 70 percent in a short time. However, there is currently hardly any sign of this skepticism. On Saturday alone, Bitcoin jumped four thousand marks, whereby, according to expert Tilo Emden, the 30,000 mark was primarily responsible for the rapid rise in prices.

“Mastering the mental mark of $ 30,000 should also have fueled the rally,” he wrote in a brief study. “Rising price levels are attracting private investors who have waited behind the sidelines for a long time and flirted with engagements. Market participants do not waste any thought on the risks and side effects of the highly volatile asset class.” Investors are in a rush of heights and thirst for new records.

“In view of the coronavirus pandemic, which is still rampant on both sides of the Atlantic, investors are apparently looking for investment ports that promise stability,” said Emden. This obviously also includes Bitcoin. “For the majority of investors, the crypto thaler remains the answer to the ultra-loose monetary policy of the world’s most important central banks. The dollar risks are increasing worldwide – the flight to alternative asset classes could accelerate again in the new year.”


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