The price of the most famous crypto currency has climbed to a new record high in the past few days. On Tuesday (December 1), a Bitcoin cost the equivalent of more than $ 19,900. The digital motto exceeded its previous high from 2017 at just under 19,700 US dollars. The big question is how far the parallels go between today and 2017. Because at that time the rally was not permanent: The Bitcoin price plummeted and in the following years moved in a range between 8,000 and 11,000 US dollars, far from the short-term record.
At first glance, it looks like history is about to repeat itself. In any case, Bitcoin has fallen significantly since Tuesday’s high. It stood at $ 19,240 on Thursday morning. However, market observers cite several reasons that the upward trend in the digital currency, which has been observed with interruptions since the beginning of the year, could be more sustainable this time.
Bitcoin course (Bitcoin / Dollar) cryptocurrency
Course provider: FXCM
Perhaps the most weighty argument in favor of a further increase in Bitcoin is that the payment service provider PayPal wants to open up to crypto currencies. From the spring of next year, PayPal users should be able to make payments in Bitcoin, Bitcoin Cash, Litecoin and Ethereum – initially only in the USA, then probably in other parts of the world as well. With other service providers, users can already pay with digital coins, but these have significantly less market power than PayPal. The move of the payment giant, so the calculation of many investors, could massively promote the acceptance of cryptocurrencies as a means of payment.
Bitcoin volatility has subsided
A second argument that the Bitcoin rally could continue is the imminent introduction of another digital currency: The Facebook-supported motto Libra, which should actually be launched in September, will soon be launched under the new name Diem . With the name change, the initiator of the currency, the Diem Association, wants to emphasize its independence from Facebook. Its participation had caused criticism from supervisory authorities. Though Diem is set to compete with Bitcoin, the oldest cryptocurrency could benefit if digital coins become even more popular with the attention paid to Diem.
Wealth professionals make further arguments for the fact that the recent Bitcoin rally cannot be compared with the flash in the pan three years ago. They point out, for example, that today significantly more institutional investors are active in the crypto market than in the past, who invested more long-term and thus supported the prices. “The volatility of Bitcoin & Co. has demonstrably decreased in recent years,” says Nicolas Biagosch, managing director of the Düsseldorf investment company Postera Personal-Financial.com, which offers a crypto asset fund. In addition, digital currencies are now more strictly regulated. “While there was still a Wild West mood in 2017, supervisors around the world are now taking a very close look at what is happening in the crypto markets,” says Biagosch.
The arguments for a sustainable upward trend in Bitcoin sound plausible. “But they are not a guarantee for a continuation of the dynamic or even a sideways movement”, emphasizes Sören Hettler, analyst at the cooperative DZ Bank. In other words: The Bitcoin can crash again at any time, even without there being a clear reason for it. Investors with a low risk tolerance should therefore still stay away from the cryptocurrency.
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