It has been an interesting year for cryptocurrencies. Bitcoin just topped its all-time high this week at almost $20,000 – up 1.6x from last year at this time. The private, all-digital currency still has its skeptics, but it is getting broader acceptance among financial services companies and institutional investors.
The pandemic may be remembered as Bitcoin’s coming of age.
I wondered back in April if Bitcoin would be a ‘safe harbor’ in the pandemic. My own investment thesis on cryptos is that they have potential to be a better store of value than government controlled sovereign currencies.
Related: Bitcoin Amid CV19
In a year where the Fed has expanded the entire money supply (M2) by 20% out of thin air, Bitcoin has (in the short term) supported that thesis.
Additionally, PayPal/Venmo and Square are now offering Bitcoin trading to anyone with an account and they are reporting stronger-than-expected activity in their first month.
Large institutional investors are also piling in. A CitiCorp analyst recently suggested cryptos should be a part of everyone’s portfolio and made the case for their value potentially rising to $300K.
Yes, I still see Bitcoin as a very speculative investment with a lot of risk, but also a lot of potential. I also told you in my last post that I ‘missed’ on Tesla, Amazon, and Facebook. I don’t have a lot ‘bet’ on Bitcoin, but maybe this is the one I’ll be right on?
Are you surprised by Bitcoin’s 2020 run?
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