Bitcoin sets record as it passes $66G
Crypto continues to thrive as investors diversify
NEW YORK — Bitcoin stormed above $66,000 for the first time Wednesday, riding a wave of excitement about how the financial establishment is increasingly accepting the digital currency’s rise.
Bitcoin was trading at $66,631, up 5.2%, in afternoon trading Wednesday, after earlier climbing as high as $66,974.77. It has roared back after sinking below $30,000 during the summer to top its prior record set in April. That previous alltime high was nearly $64,889, according to CoinDesk.
The surge has come as more businesses, professional investors and even the government of El Salvador buy into Bitcoin, further broadening its base beyond its initial core of fanatics.
The latest converts came into the world of crypto on Tuesday, when the first exchange-traded fund linked to Bitcoin found huge interest from investors. Shares of the ProShares BitCoin Strategy ETF changed hands 24.1 million times in a resounding debut.
The ETF doesn’t invest directly in Bitcoin. It instead invests in the futures market tied to Bitcoin, but the industry sees the ETF bringing in a new class of investors. Someone with an oldfashioned brokerage account can buy the ETF without having to open a trading account for crypto.
Investors are getting more interested in Bitcoin because they’re always looking for assets whose prices move independently of everything else in their portfolios. One school of thought says Bitcoin can offer investors protection from high inflation, and some fans see it as akin to “digital gold,” though it doesn’t have a long track record to back that up.
More high-minded fans say digital assets are simply the future of finance, allowing transactions to sidestep middlemen and fees with a currency that’s not beholden to any government.
Cryptocurrencies are notorious for their volatility, a reason for which is the wide range of possibilities for the future, said Gil Luria, technology strategist at D.A. Davidson.
On one end, Bitcoin could go to zero if it ends up being a fad or if another cryptocurrency supplants it. On the other, it could usurp the role of the U.S. dollar and other currencies and become “all of money.” More people take a position in the middle, believing that Bitcoin can be useful and has some value.
Luria said he sees only a 1% probability of the “all of money” scenario happening, but that’s a better chance than he saw five years ago.
“To become all of money, you have to get a lot of people on board,” he said. And the last year has seen many new people come into Bitcoin as it’s hit records and become more mainstream.
“The higher Bitcoin goes,” he said, “it becomes a selffulfilling prophecy.”