Bitcoin's dizzying journey continued this week, as the cryptocurrency reached new heights in excess of $55,000 before falling back.
A sudden sell-off earlier in the week saw Bitcoin climb back past $50,000 this morning following Square's annoucement it had bought $170m worth of the digital coin. Square is an American financial services start-up which is owned by Jack Dorsey, CEO of Twitter.
Bitcoin hit $57,000, which gave it a market capitalisation of more than $1 trillion. In addition, Ethereum, the second-largest cryptocurrency, surged past $2,000 for the first time, giving it at the time a market cap of $226 billion.
This week, the prices have dipped and the Bitcoin market is currently worth around $900bn.
Nigel Green, CEO of deVere Group, was gung-ho, describing Bitcoin's recent rally as "hugely impressive": "Despite this week's drops, the Bitcoin price has still soared by almost 360% over the last 12 months, partly fuelled by endorsements made by Tesla billionaire Elon Musk, amongst others, and growing interest from institutional investors."
"This hugely impressive run has captured the attention of people around the world - and not just so-called 'digital native' younger generations, as is typically, and somewhat patronisingly, portrayed."
"Boomers and Gen X, it seems, are just as excited about digital currencies, with seven out of 10 already invested in crypto, or will do so in the near future, according to the poll.
"They too recognise that digital, borderless money is the way forward."
Citing a recent deVere Group survey, Green said: "While the recent massive social media hype and clickbait headlines are more of a catalyst for millennials and Gen Z to consider investing in the likes of Bitcoin, there are other drivers for older generations.
"The over-55 respondents to the survey frequently cited a key factor for their interest in crypto is the historic levels of money-printing as central banks around the world attempt to prop-up their economies following the fallout from the pandemic."
'Bubble is bursting'
Adrian Lowcock, head of Personal Investing at UK investment platform Willis Owen, was more cautious. "The bubble in bitcoin is bursting today in its trademark spectacular fashion, with little sign of any floor for prices for now," he said.
"It is easy to think that bitcoin is becoming mainstream as more financial giants get involved in crypto and business leaders such as Elon Musk back it (and then subsequently question its value), but today shows just how volatile these things are."
"It is important to remember that Bitcoin and cryptocurrencies are still an emerging technology and trying to value them is very hard indeed. Given this and the volatility in the price, investors should be very wary when putting money into them and only be prepared to invest what they are willing to lose."
