The interest on the part of well-known investors and blue chip companies is one reason why bitcoin fans think the current rally differs from late 2017 — when prices rose to nearly $20,000 before crashing to around $3,500 just a year later.
“In 2017, the surge was mainly driven by retail investors aiming to earn a quick buck. Now, we can largely attribute recent growth to large scale institutional involvement,” Jai Bifulco, chief commercial officer with Kinesis, a gold and cryptocurrency firm, said in an email to CNN Business.
But “cryptoassets are infamously volatile,” he added.
Bumpy ride ahead but prices may keep climbing?
That is certainly the case. Some experts think bitcoin prices may have more room to run due to the Covid-19 crisis.
“Economic uncertainty from the pandemic has led to an influx of investors looking to safeguard assets from traditional market downfalls,” Don Guo, CEO of Broctagon Fintech Group, a cryptocurrency exchange consulting firm, said in an email to CNN Business.
“As governments provide relief through monetary stimulus, investors are turning towards bitcoin to hedge against expected inflation,” Guo added.
Not everyone is convinced that the price can keep climbing.
Pickard added that “perhaps [bitcoin] is just a bubble driven by a frenzy of retail, and some institutional, money eager to get a piece of the action.”
Both can be true.