Bitcoin price is making a mockery of previous records

The world’s largest and most famous cryptocurrency, Bitcoin, has sailed past a valuation of $30,000 dollars per coin, just weeks after breaking the $20,000 barrier for the first time.

To the delight of Bitcoin Bros and HODLers everywhere, the digital currency - famed for its extreme volatility - even surged beyond the $34,000 mark over the weekend. After a small correction, Bitcoin is currently hovering around $32,000.

The arrival at the current valuation is the product of a bull run (or period of growth) that began in late November, at which point the cryptocurrency was valued at just $16,500.

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Bitcoin price

Ever since Bitcoin entered the public consciousness, a debate has raged on about whether its meteoric rise in value constitutes a market bubble (when the value of an asset becomes wildly over-inflated) or is simply representative of the role cryptocurrency could play in the financial ecosystem of the future.

Long-time holders of the cryptocurrency (also known as HODLers) have had to weather a series of rises and falls in value. Most famously, after reaching highs of $19,783.21 in December 2017, Bitcoin plummeted to below $8,000 within just two months. 

Investors that came in at the peak saw 60% of the value of their investment wiped out, which some saw as the popping of the Bitcoin bubble.

The most ardent Bitcoin supporters, however, maintained that the currency would reach new heights well beyond the $30,000 mark. In December, for example, the CIO of asset management firm Guggenheim Investments told Bloomberg he believes Bitcoin “should be worth about $400,000”.

Rising confidence in the cryptocurrency is also echoed in interest shown by institutional investors. In recent months, insurance giant MassMutual purchased $100 million-worth, while tech firm MicroStrategy converted most of its balance sheet (circa $500 million at the time of initial purchase) to Bitcoin - and has even raised additional capital to finance further purchases.

However, while Bitcoin may yet reach far loftier valuations, investors looking to catch this latest wave should exercise a measure of caution. As in 2017, a significant market correction may soon take place, shaving billions off the cryptocurrency’s market capitalization.

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