Zan Baldwin, a computer coder, was as surprised as everyone else with bitcoin’s rise. She tweeted: “What the actual hell is happening to #Bitcoin?! Value has doubled in the space of a month!”
Bitcoin’s price actually crashed in mid-July to $1,993, before rebounding to $4,382 by mid-August. The digital currency began 2017 at around $997, meaning its price has climbed over 320 per cent since the start of the year.
But Ezequiel Gorbatik, a software engineer, doesn’t believe that bitcoin has peaked in price.
“If you think bitcoin value is high...wait for the next WAR,” he tweeted on Tuesday.
Gorbatik is referring to bitcoin’s status as a safe-haven investment. It has earned this reputation over the past few years as the currency’s value has increased in times of uncertainty or geopolitical tension, such as after the British referendum in 2016, and during the current crisis between North Korea and the US.
Goldman Sachs’ analyst Sheba Jafari does agree that the price will continue to climb, but will eventually see a significant portion of its value wiped out in a correction.
In a report on Sunday, Jafari said that bitcoin could reach $4,827, an increase of around $500 on Monday’s record high of $4,300.
Jafari believes, however, that this increase in value will precede a steep drop in value, potentially going as low as $2,221.
On social media user who agrees that bitcoin is overvalued is Grant Z Price, a healthcare project manager, who tweeted on Tuesday that the biggest risk to the asset is that “there is no barrier to entry for digital currency,” adding: “The profluence of competitors will eventually sink the #Bitcoin value.”
This has certainly been the case recently, with thousands of new currencies entering the market, looking to capitalise on the digital currency boom. Some fear that having so many different variations of an already misunderstood technology will lead to people losing interest.
By Ed Clowes Staff Reporter
Gulf News 2017. All rights reserved.