Bitcoin Cracks $50,000
The world’s preeminent cryptocurrency has been on a phenomenal rise over the last year. Per coindesk.com one year ago Bitcoin was trading at around $9600 per coin, now one year later a single Bitcoin is now just around $53,000. That is a 5.5x increase in a year. That is an unheard of annual return in a standard security.
Why has the price of Bitcoin risen so much in the last year?
That is a complicated multi-faceted answer. At a macro level in the year 2020 people began to see cryptocurrency and Bitcon in particular as a hedge from traditional currency. In fact some financial analysts called Bitcoin a safe haven asset similar to gold. Then the coronavirus hit in March and Bitcon sold off losing almost 40% in one day. At this low price people began to pour into the market. The flood of new investors coupled with the Federal Reserve pouring in trillions of dollars to keep a lockdown economy afloat Bitcoin began its rise. By the fall Bitcoin was up around 50% year to date as the US and World economies began to get back on track. With bitcoin already sitting at an all time high some investors were still bullish, many called for more and more rise in the famed cryptocurrency. Big banks and other establishment firms began to embrace this “digital gold”. Scott Minerd, chief investment officer for the Wall Street firm Guggenheim, predicted bitcoin could go to $400,000.
That is where we are now. Bitcoin has broken a hard resistance level of $50,000 and has held for several days. The sky is really the limit for this asset/currency/commodity no one really knows how far it will go or when it might sell off.