Bitcoin surged to $66,000 on Wednesday thanks to excitement over how the financial system is accepting digital currency’s rise.
Bitcoin traded at $66,631 as of 2:30 PM Eastern Time, up 5.2% after climbing to $66,974.77 earlier in the day. After falling below $30,000 in the summer, it has rebounded to surpass its previous record of $66,631, set in April. According to CoinDesk, the previous record was close to $64,889
This surge is due to more businesses, professional investors, and even the government in El Salvador buying Bitcoins, expanding its base beyond its original core of enthusiasts.
On Tuesday, the latest converts to crypto came in the form of investors who were very interested in the first exchange-traded bitcoin fund. ProShares BitCoin Strategy ETF shares changed hands 24.1 millions times during its debut. The volume reached 19.6 million in the first three trading hours. Wednesday was another strong day for the ETF.
The ETF does not invest in Bitcoin directly. The ETF invests in the futures markets tied to Bitcoin. However, the industry believes the ETF will bring in new investors. An old-fashioned brokerage account is sufficient to purchase the ETF.
Because they are always on the lookout for assets that can move independently from everything else in their portfolios, investors are becoming more interested in Bitcoin. Some believe Bitcoin can provide investors protection against high inflation. Others see it as “digital gold” but it doesn’t have a long track history to support that claim.
Digital assets are favored by more high-minded people because they allow transactions to bypass middlemen and fees, while allowing for a currency that is not tied to any government.
Although cryptocurrencies have the potential to win over many, they are far from being universally accepted. Critics point out that they aren’t widely accepted as a form of payment. Critics also point out how much energy the crypto system uses, which contributes to climate-changing emission. All the regulatory scrutiny that shines on it is, however, the biggest threat.
China declared Bitcoin transactions illegal last month. The U.S. Securities and Exchange Commission chair has stated that crypto investors don’t have sufficient protections.
The price swings that cryptocurrencies can make are well-known. Bitcoin’s record-setting price was broken in December 2017. The price fell by half within three months.
According to Gil Luria (technology strategist at D.A.), one of the main reasons for this volatility is the wide range of possible futures for Bitcoin. Davidson.
Bitcoin could be worthless if it becomes a fad, or if another cryptocurrency takes its place. It could also take over the U.S. dollars and other currencies, and “all of it” and replace them.
Luria stated that he only sees a 1% chance of the “all-of-money” scenario, but it’s better than what he saw five year ago.
He said, “To make all of the money, you need to get lots of people onboard.” As Bitcoin has become mainstream and hit new heights, many people have joined Bitcoin in the past year.
He said that the higher Bitcoin goes, the more it becomes a self-fulfilling prophecy.