The largest cryptocurrency -- bitcoin -- surged 37 per cent on Saturday before falling back a bit to $23,481 as of Sunday evening, according to the largest US cryptocurrency exchange Coinbase, reportedly valued at $7.7 billion, that had earlier this week announced filing for its IPO.
The Supreme Court had lifted the RBI ban on banks and financial institutions from offering services to businesses or individuals dealing in digital currencies.
Bitcoin has been on a tear again in the past few days, hitting a fresh new all-time high of $24,200 per bitcoin after beginning to rally from $17,637 on December 11. The largest cryptocurrency — bitcoin — surged 37 per cent on Saturday before falling back a bit to $23,481 as of Sunday evening, according to the largest US cryptocurrency exchange Coinbase, reportedly valued at $7.7 billion, that had earlier this week announced filing for its IPO. However, amid this record jump, Coinbase CEO and Co-founder Brian Armstrong has cautioned crypto investors of the inherent ‘risk’ in the asset class.
“We cannot emphasize enough how important it is to understand that investing in crypto is not without risk. For one, crypto can be a volatile asset class — often more so than the types of traditional financial instruments that most investors are used to. For example, this means that the market can move in either direction much faster than equity markets,” said Armstrong in a company blog post on Thursday. According to the blockchain analysis company Chainalysis, as reported by CNBC, investors who bought at least 1,000 bitcoins worth around $23 million at Friday’s price and had set-up an account for less than a year, led to significant demand since September.
“We are noticing more and more BTC (bitcoin) leaving exchanges across the world, 19 per cent more transfer than the 2017 price increase, which is a signal that investors are holding BTC as long-term investments. With more players joining the bandwagon we will be noticing more price increases in the days to come,” said Vikram Subburaj, Co-Founder and CEO of Chennai-based Giottus Cryptocurrency Exchange.
According to Philip Gradwell, chief economist at Chainalysis, bitcoin’s price more than doubled from the $10,000 level in the time new investors enhanced their buying spree. The new demand helped boost the cryptocurrency’s rally to an all-time high. Armstrong, however, alerted “investors who may be focusing on short-term speculation and encourage customers to seek out resources and consult financial advisors to better understand the risks associated with investing in cryptocurrencies.”
In India, the Supreme Court in March had lifted the RBI ban on banks and financial institutions from offering services to businesses or individuals dealing in digital currencies. The RBI circular earlier had said declared cryptocurrency-related entities such as virtual currencies, crypto assets, etc, illegal and had asked banks, payment companies to withdraw support. “I believe the coming year will see a significant rise for bitcoin. With recent announcements from MassMutual, Fidelity, Microstrategy, and Square, we’re seeing institutional capital to the tune of hundreds of millions of dollars entering into the picture. Coupled with wider awareness and education, it’s easy to envision the price of bitcoin going up by 100 per cent in 2021. That’s why the time is now to get into bitcoin,” said Rahul Pagidipati, CEO, ZebPay.