Bitcoin reached a new record and traded above $35, 000 in Asia on Wednesday, as reported by Reuters. Back in December, we were writing about the most famous’ crypto’s extraordinary growth since the beginning of the Pandemic. On December 16 the cryptocurrency has for the first time in history crossed the $20, 000. Now, less than a month later, 2021 bitcoin is soaring up to the legendary $35, 879.
There are speculations that as bitcoin increases in its role of “digital gold” and can potentially be established as a safe-haven asset, many investors have very positive predictions as to its future run. On Tuesday of this week, JPM, the giant investment bank, has spoken out saying that bitcoin can trade at up to $146, 000.
Where Does Bitcoin Growth Come From?
From March of 2020, roughly the time when the Covid-19 pandemics became a global crisis, and the large portions of the world introduced strict restrictions, the interest in the cryptocurrency has soared. Bitcoin, being the largest and most established crypto in the world, has particularly benefited from this increased interest.
With the investors perceiving cryptocurrencies as an alternative to depreciating traditional currencies and a hedge against inflation, the price of bitcoin has more than tripled in the past half a year. Thus, it is not surprising that the talks about 2021 bitcoin being “the new gold” are more and more common.
As Reuters reports, JPM has said, “Considering how big the financial investment into gold is, a crowding out of gold as an ‘alternative’ currency implies big upside for bitcoin over the long term”
Does Bitcoin Have A Chance Of Replacing Gold?
As the Millennials are set to become a gradually larger fraction of the investment market, 2021 Bitcoin’s competitive advantage will grow. Young people are more likely to prefer the digital asset like crypto over physical hold. Having said that, the JPM analysts said that we do not have the information on the long-term volatility of bitcoin as compared to gold and that until the volatility levels out, bitcoin’s growth is not sustainable.
Apart from bitcoin, the other cryptocurrencies are also experiencing growth in the past months. On Monday of this week, trading volumes reached a daily height record of more than $68 billion. A large part of it is, of course, the unprecedented performance of bitcoin. However, Ethereum which is the second-biggest cryptocurrency has also reached a very high level this week, its price going up to $1,170, the best since the beginning of 2018.
The average daily trading volumes for cryptocurrencies this year lays on $13.1 billion. Thus, the legendary $68.3 billion trading volume achieved on Monday shows the trust that more and more investors put into the biggest crypto.