At the beginning of last month, the leading cryptocurrency in the world Bitcoin surged in price and it continues almost unabated, and one expert believes there is more behind the powerful move than rampant trader speculation.
Bryan Routledge, an associate professor of finance at the Tepper School of Business, Carnegie Mellon University explained, “I think that some of the prices of Bitcoin are a bit of a mystery in the sense that why it has quadrupled over the year. But the fact it is what it is, and I think it is a validation that the blockchain technology is real and effective.”
The fact the Bitcoin market appears to be functioning well during its more than tripling in price since October feeds the validation narrative. In turn, that could resurface talk of blockchain technology being ready for primetime use to power the next generation of business processes. Such talk had died down amid Bitcoin’s and other cryptocurrencies’ price crash in late 2018.
Routledge added, “People might think about Bitcoin as something they want to own as it is perhaps access to this blockchain technology in the sense that I want to own a piece of this future technology,”.
Bitcoin prices surged beyond the $30,000 mark this weekend and are hovering near fresh record highs. On Sunday evening, prices crept to about $32,000. Over the past year, Bitcoin prices are up a sizzling 338%.
Those active in the market trading Bitcoin say newfound institutional demand has fuelled the latest surge, not just views on the blockchain. The buying, pros think, only supports the view of Bitcoin as a credible alternative to fiat currencies.
In December, insurance giant MassMutual unveiled a $100 million investment in Bitcoin for its general investment account. PayPal continues to buy up Bitcoin to support the launch of the capability to buy, sell, and trade cryptocurrency from a PayPal account.
And Jack Dorsey’s Square recently said it will allow customers for the first time to receive Bitcoin back on transactions, a move that triggers the payments platform to buy more Bitcoin.
Speaking to Yahoo Finance, crypto bull Mike Novogratz said that “Bitcoin is for everyone” and suggested that everyone should put 2% to 3% of their net worth in Bitcoin for it is going to be a whole lot more in five years.