Bitcoin has risen even higher, soaring to all-time highs of over $ 24,000 per bitcoin after the week’s start of under $ 19,000.
The price of bitcoin, up a staggering 30% this week alone, climbed to $ 24,220 on the Bitcoin and cryptocurrency Bitstamp exchange in Luxembourg before falling back a bit.
However, in the midst of a massive bitcoin and cryptocurrency Santa rally this week – which has added over $ 100 billion to the value of the world’s digital tokens – Coinbase chief executive Brian Armstrong has warned of the “risk” of bitcoin and cryptocurrency investing.
“While it is great to see market rallies and news organizations turning this new emerging asset class into a new way, we cannot stress enough how important it is to understand that investing in crypto without risk, “Armstrong wrote in a blog post this week – published just before the San Francisco-based company revealed it had secretly filed for a long-awaited initial public offering (IPO) with the U.S. Securities and Exchange Commission ( SEC).
Coinbase is jumping on the IPO bandwagon at a time when other tech companies, like Airbnb and DoorDash, are negotiating with sky-high valuations. When Coinbase, which makes money through fees tied to customer trades, last raised money in 2018 it was worth $ 8 billion.
“Crypto can be a volatile asset class,” Armstrong added. “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 much the same way faster than markets equity. “
The price of bitcoin, after starting the year at around $ 7,000, fell to less than $ 4,000 in March as the coronavirus pandemic caused markets to collapse. It quickly rebounded to around $ 10,000 and began climbing toward its all-time high of 2017 in October.
The bitcoin price surge has accelerated in recent months as a growing number of high-profile investors name bitcoin as a potential inflation hedge and some of Wall Streets’ largest banks are changing their tune on the digital token asset class.
“Like all asset classes, crypto markets will rise and fall over time,” Armstrong wrote, pointing to a bitcoin bubble in 2017 that saw the bitcoin price climb below $ 1,000 at the start of the year to about $ 20,000 in only to crash back to $ 3,000 in 2018.
“We sometimes see strong rallies in the market where prices rise quickly and aggressively. While we’re always excited to see more interest in crypto, it’s also important to note that this is not only a time of high volumes, but also a price volatility. “
Despite these warnings, the bitcoin and cryptocurrency community has been celebrating the return of the bitcoin price to its all-time highs, with many long-term cryptocurrency investors feeling justified after three years out in the cold.
“We are now officially in uncharted territory,” Ian Balina, chief executive of Washington DC’s bitcoin and cryptocurrency data company Token Metrics, said by email, adding that he believes the bitcoin price could climb to around “$ 50,000 within the next few years. “
“I think a low $ 20,000 is just the beginning,” JP Thieriot, chief executive of the bitcoin and cryptocurrency exchange in California, said in email comments.
“This upward trend is likely to continue for months to come, as investors continue to buy into consumer-driven digital platforms that offer more access to these markets than traditional financial service providers do. do it. “