A representation of virtual currency Bitcoin is seen in front of a stock graph in this illustration taken November 19, 2020

Bitcoin has topped $30,000 for the first time, extending a rally that saw its value climb by 300% in 2020.

The cryptocurrency rose to as high as $31,824 early on Saturday – just two weeks after passing the $20,000 mark.

Its rise has been attributed to traders increasingly betting on it becoming a mainstream payment method.

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Carney: Cryptocurrencies must be regulated

Investors have also been attracted by the potential for quick gains.

Some also saw it as a safe-haven store of value during the pandemic – like gold, an asset which traditionally rises during times of wider market volatility.

In previous years, investors had a bumpy ride as it climbed to around $20,000 in 2017 before slumping 80%.

Bitcoin is the most valuable and popular of a range of digital currencies and some have suggested it could pass $100,000 this year – but others dismiss such predictions as outlandish.

Bank of England governor Andrew Bailey recently said he was “very nervous” about people using Bitcoin to make payments.

He has also warned that people who invest in the cryptocurrency should be prepared to “lose all their money”.

The governor of the Bank of England (BoE)  Andrew Bailey
Image:
Bank of England governor Andrew Bailey has warned about the risks of cryptocurrencies

In October, the Financial Conduct Authority (FCA) said crypto derivatives – financial products based on the price of Bitcoin and other cryptocurrencies – would be banned from sale to retail consumers from next January.

It said consumers were at risk of “sudden and unexpected losses” from the investments – effectively bets on cryptocurrency prices – and that the ban would save them about £53m a year.

The FCA says cryptocurrencies have no intrinsic value.

But its supporters point out that Bitcoin is accepted by companies including Starbucks and Microsoft as a form of payment.

(Excerpt) Read more Here | 2021-01-02 11:36:04
Image credit: source

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