Bitcoin price soars above $18,000, the highest level since 2017

November 18, 2020 by No Comments

Bitcoin rose above $18,000 on Tuesday evening, reaching its highest value since December 2017. Indeed, prior to this week bitcoin has only been worth more than $18,000 for a brief four-day period at the peak of the 2017 bitcoin boom: from December 16 to December 19.

After reaching a high around $19,500 in December 2017, the currency’s value fell to $6,000 in February 2018, then to $3,200 in December. Since then, its value has risen in fits and starts, rising above $18,000 late on Tuesday.

Bitcoin’s value fell a bit in Wednesday morning trading. As I write this, one bitcoin is worth around $17,800.

Bitcoin’s rising price has been driven by increasing interest from a number of large investment firms and financial service providers. An investment firm called MicroStrategy has poured $425 million into bitcoin in recent months. Square announced a $50 million bitcoin investment last month.

PayPal announced support for bitcoin in October and opened the service to the general public last week. Mexican billionaire Ricardo Salinas Pliego recently revealed that he has 10 percent of his liquid portfolio invested in the cryptocurrency.

And of course each announcement builds up the buzz around bitcoin and causes other investors to give the cryptocurrency another look. The more people invest, the more the price rises, and the rising price generates more news coverage. This cycle has driven several previous bitcoin booms, and it seems to be driving a new one.

But there’s no guarantee that the latest boom will be sustained. For example, in the spring of 2019, bitcoin seemed to be in the midst of a robust recovery, rising from $3,200 in late 2018 to $14,000 in June 2019. But then that rally fizzled out, and bitcoin crashed back down to $4,000.

So bitcoin’s price might soar above $20,000 in the coming months. But it could just as easily crash, inflicting big losses on people who jumped in near the peak. Investors should beware.

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