At more than $30,000, cryptomoney is attracting the attention of institutional and individual investors. A risky market.
Since the beginning of 2021, the Bitcoin graph has resembled the north face of Everest: a vertical wall. The price of cryptomoney has risen from $10,000 (around ‘8,312) on 1 October 2020 to $36,140 on 3 February 2021, with a peak of more than $40,000 in the very first days of the year. But unlike the roof of the world, Bitcoin does not seem to have a peak.
« Its price is based on supply and demand, unlike traditional currencies that move according to fundamental criteria, such as central bank policies. It’s open to the most extravagant predictions when certain thresholds are crossed, » says Vincent Boy, analyst at IG.
Bitcoin has thus started a crazy race since the end of November, when it surpassed its previous historical record at the end of 2017, at $19,000. JP Morgan now envisages a forward price of $146,000, while Citibank is looking at $300,000!
A speculative asset
This unprecedented volatility is fuelling the appetite of both institutional and individual investors. « Bitcoin has gained legitimacy in recent months, as evidenced by the success of the Grayscale fund, which offers institutional investors the opportunity to invest in Bitcoin in the form of derivatives, with assets under management totalling $20.2 billion at the end of 2020, » says Manuel Valente, director of analysis and research at the French platform Coinhouse.
In addition, some major US companies have invested part of their cash in the benchmark cryptomass. It must be said that the context of yields at the floor for bond and money market rates is encouraging investors to turn to alternative investments. Individuals are not left out.
« Bitcoin is absolutely not a safe haven, both because of its extreme volatility and because it is correlated to the US market. « Vincent Boy, analyst at IG
Sites offering to buy and sell cryptomoney even have the audacity to compare Bitcoin to a safe haven, just like gold. « The main characteristic of a safe haven is to protect the investor against a market downturn. Bitcoin does not play this role at all today, both because of its extreme volatility and because it is correlated to the US market, » Vincent Boy contests.
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