Tuesday, Bitcoin (BTCUSD) hit its highest mark in 10 months, raising hopes among cryptocurrency fans of greater mainstream acceptance, but others urged investor caution.
Bitcoin, which lost 75% of its value in Y 2018, has soared by 24% since Friday and more than 2X’d in price so far this year.
Currently Bitcoin is trading at: 8,038.55+58.45 (+0.73%)As of 5:34a BST, the market is open.
There seems to be no reason for the sudden rise, as some traders said investors moved money to Bitcoin, treating it as a safe haven as traditional financial markets stumbled on fears that a worsening US-China trade dispute could derail the global economy.
But none of the 4 traders that Reuters spoke to could produce evidence to support that claim.
Some say buying Bitcoin could be a flight to safety for people who view it as a gold-type asset, we do not see it that way. See Bitcoin as a high-risk, high-growth asset, or a bet on an emerging technology.
Unexplained price swings have been the norm during Bitcoin’s last 10 yrs. Just last month, Bitcoin had its biggest daily gainer for a year, leaving investors perplexed about the move.
Whatever the reason, price moves like we are seeing YTD are a reminder that cryptocurrencies are a highly speculative market where prices are not linked to fundamental factors such as technological development.
The lack of transparency and thievery in crypto markets could dampen hopes that digital money can progress from speculative tokens to an asset accepted by mainstream investors.
“If most of the regulators and traders themselves are only vaguely aware of what is likely to happen in the next few days or weeks, then clearly the levels of risk associated with investing are very high,” an analysis firm specializing in fintech said.