- For the first time, the world’s most popular cryptocurrency Bitcoin cracked the US$20,000 (A$26,350) on Wednesday following amid a resurgence in popularity
- It’s the second milestone in recent weeks, following a three-year high at the end of November
- While it appears to be entering more of a mainstream role in the investment sphere, many fund managers remain sceptical
- Many sophisticated and institutional investors believe the cryptocurrency has no intrinsic value, is extremely volatile and can be easily manipulated
- That said, everyday investors seem bullish on the digital asset, with a recent study showing that 18.4 per cent of Australians own some type of cryptocurrency
For the first time, the world’s most popular cryptocurrency Bitcoin cracked the US$20,000 (A$26,350) on Wednesday following amid a resurgence in popularity.
The blockchain-based currency has tripled in value so far this year, despite a major crash in March that saw it drop 25 per cent, and was trading as high as $US21,780 ($28,700) on Thursday afternoon as more retail and institutional investors bought in.
It’s the second milestone in recent weeks, following a three-year high at the end of November.
“Many of our clients have been expecting bitcoin to surpass its all-time high of US$20,000 given the recent news from major institutional players like SGX and MassMutual openly endorsing bitcoin,” said Scott Freeman, co-founder and partner at trading firm JST Capital.
“While this is a major milestone for this nascent asset class, as retail, institutional, and blue-chip investors alike allocate more capital to this space, it would not be surprising to see other coins follow in BTC’s footsteps and for this upward trajectory to be sustained into 2021.”
While Bitcoin appears to be carving a more mainstream position in the investment sphere, many fund managers remain sceptical, viewing it as a gamble compared to traditional equities.
Geoff Wilson, chairman and founder of $3.5 billion fund Wilson Asset Management, said he believes the currency’s underlying technology could be the future of payment systems, but noted that he is less bullish on the asset itself.
“As an investment, it is extremely volatile and appears to be easily manipulated,” he said. “Thus it is not a prudent investment, it is not strategic for us as an investor and in our view, it is not sustainable.”
Even billionaire Warren Buffett, the patron saint of investors the world over, dismissed it – and other cryptocurrencies – as worthless in an interview with CNBC earlier this year.
“Cryptocurrencies basically have no value. They don’t produce anything. You can’t do anything with it except sell it to somebody else. But then that person’s got the problem,” he warned.
That said, the pessimism among major investors is not mirrored by everyday investors. A recent study by Independent Reserve, one of the Australia’s largest cryptocurrency exchanges, showed that 18.4 per cent of Australians own…
Read more:Bitcoin breaks US$20,000 while institutional investors remain cautious – The Market