Bitcoin price hits all-time high as cryptocurrency soars 1,000% in a year
THE price of bitcoin has hit a record high as interest in cryptocurrencies continues to boom.
Bitcoin has soared above $62,000 (£45,000) for the first time, according to CoinMarketCap’s price index.
The latest surge means bitcoin has more than doubled in price in the last year and comes as digital currencies become more mainstream.
Paypal said that it will let users buy and sell bitcoin for the first time – and even use it to make purchases.
But there have also been warnings around scams related to cryptocurrencies, and prices are volatile.
5 risks of crypto investments
THE Financial Conduct Authority (FCA) has warned people about the risks of investing in cryptocurrencies.
- Consumer protection: Some investments advertising high returns based on cryptoassets may not be subject to regulation beyond anti-money laundering requirements.
- Price volatility: Significant price volatility in cryptoassets, combined with the inherent difficulties of valuing cryptoassets reliably, places consumers at a high risk of losses.
- Product complexity: The complexity of some products and services relating to cryptoassets can make it hard for consumers to understand the risks. There is no guarantee that cryptoassets can be converted back into cash. Converting a cryptoasset back to cash depends on demand and supply existing in the market.
- Charges and fees: Consumers should consider the impact of fees and charges on their investment which may be more than those for regulated investment products.
- Marketing materials: Firms may overstate the returns of products or understate the risks involved.
This means cryptocurrency prices can rise and fall sharply, and you can be left with less money than you put in.
Remember, you should never invest money that you can’t afford to lose.
Coinbase, a company which lets you buy and sell bitcoin and other cryptocurrencies, is set to list its shares on the Nasdaq stock exchange this week.
It’s the first cryptocurrency trading platform to go public and is seen as a major milestone in the crypto world.
Bitcoin hit previous highs in February, when Tesla announced it would soon be allowing customers to make purchases using Bitcoin.
Bitcoin is also being embraced by the traditional finance world.
What is Bitcoin?
HAS Bitcoin got you baffled? Here’s what you really need to know
- Bitcoin is a virtual currency
- It’s traded between people without the help of a bank
- Every transaction is recorded in a public ledger, or “blockchain”
- Bitcoin is created by mining
- Mining involves solving difficult maths problems using computer processors
- Bitcoin can be traded anonymously, which makes it a popular way of funding illegal activities
- Bitcoin is one of many different cryptocurrencies, but by far the most popular
Both Mastercard and BNY Mellon, America’s oldest bank, have announced their plans to incorporate bitcoin into their multi-billion dollar businesses.
Mastercard said they would begin allowing their platform to support bitcoin payments this year, while BNY Mellon went a step further and said they will be transferring and issuing the cryptocurrency.
Investors have ploughed cash into the digital currency, which is highly volatile, during the coronavirus crisis this year sending it to new highs.
The price previously plummeted when the coronavirus crisis first hit, sinking to £3,300 last March.
Hitting today’s record high means the price of bitcoin has increased by more than 1,000% since then.
Digital currency Ethereum – the second largest cryptocurrency after bitcoin – also hit a high of $2,205 on Tuesday.
An advert for a bitcoin exchange Coinfloor was banned last month by the advertising watchdog for suggesting buying the cryptocurrency is a secure way to invest.
City watchdog the FCA issued a warning against investing in cryptocurrencies in January.
People considering investing in Bitcoin or shares and stocks have been warned over “risky” tips being shared on TikTok.