Major hedge fund managers and central banks all around the globe had refused to believe in bitcoin (BTC) as currency or medium of exchange – which was part of the reason bitcoin price dipped from $19,000 to $6,000 in less than one month.
Institutional analysts and investors blamed lack of store value and the huge price volatility for their denouncement of the world’s top cryptocurrency.
BANK of England (BoE) Chief Mark Carney said, “bitcoin has pretty much failed as a currency by standard benchmarks and is neither a store of value nor a useful way to buy items.”
Then, Why is Bitcoin Price Flying Higher?
Source Image: coinmarketcap.com
Amidst all the concerns, BTC price regained momentum, and the price has been flying higher over the last two weeks. Bitcoin price hit $11,500 level today for the first time since January; the price is almost 90% higher since it touched the $6,000 mark early in this month.
Some key cryptocurrency analysts argue that prices are likely to make a sustainable growth throughout 2018 and in the following years.
Dan Morehead, who bought his first bitcoin for around $72 said, “bitcoin should return to peak levels in the next couple of weeks and will continue growing from there.”
Thomas Glucksmann expects bitcoin price to rebound to $50,000 by the end of this year.
Is it a Long-Term Bet?
Bitcoin and other cryptocurrencies are purely speculative investments; they have the potential to add or wipe off billions of dollars in the span of few hours. The huge upside and downside swings in the last six months show the unpredictable nature of digital currencies, making it difficult for the investor to place the long-term bets on cryptocurrencies.
Investors also fear that bitcoin doesn’t have any underlying value, which helps in estimating the fair value of any investment. Goldman Sachs and Warren Buffett have criticized bitcoin because of lack of underlying value – both fund managers have predicted it to crash to zero in the long-term.
The short-term investors look in a better position to generate profits from speculating on bitcoin and other virtual currencies based on the market news.
Featured Image: Depositphotos/© Paulpaladin