Bitcoin breaks record by breaking the $30,000 barrier
The price of the world's leading cryptomoney began to rise at the end of October 2020 to over the $30,000 mark on Saturday for the first time in its history. Experts say that it will probably end up becoming a conventional method of payment.
In 2020 its value increased by over 290% and by 43% in December, the best figure since May 2019.
After a decade of existence, institutional investors have jumped on the bandwagon of cryptomoney. In addition, major players in the global payments ecosystem also incorporated it as a means of payment in their systems. In addition, the pandemic generated the worst fall in economic activity globally, causing central banks in major markets to inject record levels of liquidity that inflated financial asset prices in general.
A CoinShares Research report released on December 21 revealed that Wall Street funds invested $5.75 billion in crypto assets during the year, a 660% increase over 2019 due to the improved outlook for the asset class.
The online payments giant Paypal has also launched a bitcoins trading line, further boosting the virtual currency. The move by Paypal represents a change of heart for investment funds that have long been reticent about this randomly priced currency. And although experts say that many private investors are still hesitant, they say they are looking forward to it, and do not rule out records in the short term.
Analysts at the financial company JP Morgan predict that the use of bitcoin by traditional investors has just begun and compare it to the boom in gold, the traditional refuge value. A safe operation during the COVID-19 pandemic that has wreaked so much havoc on the economy.
Among the critics of cryptomoney is the American economist Nouriel Roubini, who criticises the fact that "bitcoin has no fundamental intrinsic value, use or utility or any other service; it is an "asset and a purely speculative bubble manipulated without fundamental value". He adds that "it is not even a hedge against risk episodes because every time the stock drops, bitcoin falls much more.
The bitcoin was born in 2009, just one year after the economic crisis unleashed in 2008. In that context, the creators, whose identity is unknown, although they presented themselves under the name of Satoshi Nakamoto, sought to give birth to a currency that was beyond the control of the monetary authorities so that they would not have the power to decide on its value. Furthermore, they wanted to avoid the cost of international transfers as it is a global currency.
As it does not depend on any national economy, its value often undergoes dizzying ups and downs. For example, in 2017 its value dropped to $1,000, but between November and December of that year it quadrupled.
Just a week ago, XRP, Ripple's crypto-currency and the third largest after Bitcoin and Ethreum, caused an earthquake in the sector following a lawsuit filed by the US Securities and Exchange Commission (SEC), which has put the company in serious trouble by being accused of selling XRP as if it were a currency.
Although Bitcoin, unlike Ethereum, has been largely unaffected by the Ripple case, experts say it is an SEC warning for the entire industry.
