The digital currency Bitcoin continued to soar at the beginning of the year. On Sunday, the Bitcoin rate on the Luxembourg trading platform Bitstamp rose to 34. 800 U.S. dollar. Bitcoin could not quite maintain the level, but was last at 30. 900 Dollars around five percent above the level from late Saturday night trading. The exchange rate gains add up to around 5000 dollars or 17 percent. On other trading venues, of which there are numerous, the record levels may differ, as there is no central Bitcoin trading.

Market Capitalization 600 Billion Dollars Started at the beginning of the year 2020 with about 8000 dollars, the exchange rate fell during the first Corona wave in spring to less than 4000 dollars. Then began a slow increase that accelerated sharply in the fall. Since the end of September the price has climbed by more than 23. 000 dollars or around 220 percent.

Bitcoin is the oldest and best-known digital currency. Experts had recently estimated the market capitalization to be around 600 billion dollars. There is no suitable reason for the rise in Bitcoin to the current record high shortly after the turn of the year. On the market, however, it is repeatedly stated that the digital currency has recently moved more into the focus of large financial investors and is in greater demand.

Warning of extreme exchange rate fluctuations Above all, the announcement by the payment service PayPal that it would allow its customers in the USA to pay with Bitcoins resulted in an enormous surge in demand. Interest in digital currencies is also being increased by the corona pandemic and the associated sharp rise in national debt. Because of this, some investors fear rising inflation in the medium to long term, which they want to hedge against with alternative investments.

However, experts warn of the extreme fluctuations in the price of Bitcoin. Three years ago, for example, the rate of the digital currency collapsed by around 34 percent. However, there is currently hardly any sign of this skepticism. On Saturday alone, the Bitcoin jumped four thousand marks, whereby, according to the expert Tilo Emden, mainly the 30. 000 he limit was responsible for the rapid rise in prices.

“No thought wasted on risks” “Mastering the mental mark of 30. 000 The dollar is likely to have additionally fueled the rally, “he wrote in a short study. “Rising price levels are attracting private investors who have waited behind the sidelines for a long time and flirted with engagements. Market participants do not waste any thought on the risks and side effects of the highly volatile asset class.” Investors are in a rush of heights and are longing for new records.

“In view of the coronavirus pandemic that is still rampant on both sides of the Atlantic, investors are looking for investment ports that are supposed to promise stability,” said Emden. This obviously also includes Bitcoin. “For the majority of investors, the crypto thaler remains the answer to the ultra-loose monetary policy of the world’s most important central banks. The dollar risks are increasing worldwide – the flight to alternative asset classes could accelerate again in the new year.”

(tiw)