Nothing's new with the digital currency in the month since
it crossed $20,000 — there's been no major change in how it can be used.
Although some investors are now using the notoriously volatile currency as a
“store of value," which is traditionally a title saved for safe haven investments
like gold and other precious metals.
“Will you be able to buy a cup of coffee with Bitcoin?
Probably not with the current version of Bitcoin. It's largely become a store
of value,” said Mike Venuto, a co-portfolio manager of the Amplify Transformational
Data Sharing ETF, a $391 million exchanged-traded fund that focuses on
blockchain technologies and companies that deal with cryptocurrencies.
Media attention to its rise has only added fuel to the
rally. But investors in digital currencies and companies that trade or “mine”
them are warning people to be skeptical of Bitcoin's recent rise and to be
braced for a lot of volatility.
It's been a wild ride for bitcoin the last three years. The
digital currency made its big Wall Street debut in December 2017, when the
major futures exchanges rolled out bitcoin futures. The attention drove Bitcoin
to roughly $19,300, a then-unheard of price for the currency.
Then it all evaporated. The currency's value plunged sharply
in 2018, and by December of that year Bitcoin was worth less than $4,000 a
coin. Up until this most recent rally which started in October, Bitcoin
generally floated between $5,000 and $10,000.
While in the last two years companies have embraced the
technology that underlies digital currencies like Bitcoin, a concept known as
the blockchain, the actual uses for Bitcoin have not really changed since its
rally three years ago.
It's still largely used by those distrustful of the banking
system, criminals seeking to launder money, and for the most part, as a store
of value.
In fact, other investments typically used as safe havens
during uncertain times — notable precious metals — have been trading at near
record highs as well.