Bitcoin, the world’s best-known cryptocurrency, has jumped above $17,000 to hit a three-year high. In its launch in 2009, the currency suffered plenty of wild price swings. However, investors have been turning towards cryptocurrencies during the pandemic-driven volatility on global stock markets.
On Wednesday, Bitcoin climbed more than 7% to $17,891, its highest level since December 2017. During the pandemic, many analysts have encouraged investors to reassess the long-term outlook for Bitcoin and other cryptocurrencies.
Edward Moya, at trading firm Oanda, said, “COVID-19 has disrupted the traditional safe-haven trade and gold’s inability to outperform. Periods of extreme risk aversion have forced many traders to diversify into Bitcoin.”
However, attraction towards Bitcoin is due to the scarce supply, which is capped at 21 million. This has created an air of uneasiness amongst the investors.
Head of investment strategy and chief economist at AMP Capital, Shane Oliver said, “Its huge volatility hardly makes it a safe haven as a store of value. I have far more confidence in the $50 note in my wallet retaining its value over time than Bitcoin, which seems to bounce around like a yo-yo.”
Last month, PayPal announced that its customers will be able to buy and sell Bitcoin and cryptocurrencies using their PayPal accounts, allowing customers to buy things from the 26 million sellers which accept PayPal.