Bitcoin has risen again, reaching new all-time highs of over $ 24,000 on bitcoin after starting the week at below $ 19,000.
The price of bitcoin, with a staggering 30% increase just this week, rose to $ 24,220 on the Luxembourg Bitstamp bitcoin and cryptocurrency exchange, before falling slightly.
However, amid the huge Christmas rally of bitcoin and cryptocurrencies this week – which added more than $ 100 billion to the value of digital chips in the world – Coinbase CEO Brian Armstrong warned of the “risk” of bitcoin investment and cryptocurrencies.
“While it’s great to see market rallies and news organizations focusing on this emerging asset class in a new way, we can’t stress enough how important it is to understand that investing in cryptography isn’t risk-free.” , Armstrong wrote in a blog post this week – published just before the San Francisco company revealed that it had confidentially filed a long-awaited initial public offering (IPO) with the US Securities and Exchange Commission (SEC ).
Coinbase jumps into the IPO market at a time when other technology companies, such as AirBnB and DoorDash, are debuting with high ratings. When Coinbase, which makes money through customer transaction fees, last raised funds in 2018, it was valued at $ 8 billion.
“Crypto can be a class of volatile assets,” Armstrong added. “Often more than the types of traditional financial instruments that most investors are used to. For example, this means that the market can move in both directions much faster than stock markets.”
The price of bitcoin, after starting the year at about 7,000 dollars, fell to 4,000 dollars in March, because the coronavirus pandemic caused the markets to fall. It quickly returned to about $ 10,000 and began to climb to its highest level in 2017 in October.
The rise in bitcoin prices has accelerated in recent months, as more and more high-profile investors call bitcoin a hedge of potential inflation, and some of the largest banks in Wall Streets are changing their tone in the asset class. of the digital token.
“Like all asset classes, cryptocurrency markets will grow and shrink over time,” Armstrong wrote, pointing to the 2017 bitcoin bubble that saw bitcoin prices rise from less than $ 1,000 earlier this year to about 20,000. dollars to collapse back to $ 3,000 in 2018.
“We will occasionally see strong rallies on the market, in which prices will rise rapidly and aggressively. Although we are always excited to see increased interest in crypto, it is also important to emphasize that this is not only a time of high volumes, but also price volatility. “
Despite these warnings, the bitcoin and cryptocurrency community celebrated the return of the bitcoin price to its all-time highs, with many long-term investors in cryptocurrencies feeling claimed after three years of cold.
“We are now officially in unexplored territory,” Ian Balina, executive director of Washington DC’s bitcoin and cryptocurrency data company Token Metrics, said in an email, adding that the price of bitcoin could rise to about $ 50,000 in the next few years. . “
“I think the $ 20,000 drop is just the beginning,” JP Thieriot, executive director of bitcoin and cryptocurrency exchange Uphold in California, said in e-mail comments.
“This upward trend is likely to continue in the coming months as investors continue to buy consumer-friendly digital platforms that offer greater access to these markets than traditional financial service providers do.”