The world's largest and most famous cryptocurrency, Bitcoin, surpassed a valuation of €40,000 per coin, a few weeks after hitting €20,000 for the first time. The digital currency, known for being extremely volatile, held the all-time price level for a few minutes last night, before falling to around €38,000. The arrival at the current valuation is the product of a bull run (or growth period) that began in late November, when the cryptocurrency was only valued at €16,500.
Bitcoin price
Since Bitcoin entered the public consciousness, a debate has raged over whether its meteoric price spikes constitute a market bubble (when the value of an asset becomes grossly inflated) or if they are in fact representative of the market. role that cryptography could play in the financial sector. ecosystem of the future. Long-time Bitcoin holders (also known as HODLers) have had to deal with a series of rises and falls in value. Most famously, after reaching highs of €19,783.21 in December 2017, Bitcoin fell below €8,000 in just two months. Investors who made it to the top saw 60% of the value of their investment disappear, which some saw as the bursting of the Bitcoin bubble. However, Bitcoin's most ardent supporters have long argued that the coin will reach new highs well beyond its current valuation. And now, institutional investors are beginning to gain confidence in cryptocurrencies as well. In recent months, insurance giant MassMutual has bought for €100 million, while tech company MicroStrategy has converted most of its balance sheet (around €500 million at the time of the initial purchase) to Bitcoin. . In December, the CIO of asset management firm Guggenheim Investments told Bloomberg that he believed Bitcoin "should be worth around €400,000" and that financial services firm JPMorgan also suggested the coin could be set at a valuation of several hundreds of thousands of dollars, long term. term. However, while Bitcoin can still reach much higher valuations, investors looking to catch this latest wave should exercise some caution. Just like in 2017, a significant market correction could soon take place, which could spell disaster for any investor unable to absorb losses.