NEW YORK (AP) — Bitcoin stormed over $66,000 for the first time on Wednesday, riding a wave of excitement over how the financial establishment is accepting more and more the rise of digital currency.
One Bitcoin was valued at $66,096, as of 4:15 p.m. EST, after surging to $66,974.77. The digital currency roared after dropping below $30,000 over the summer to surpass its previous all-time high set in April. This previous all-time high was nearly $64,889, according to CoinDesk.
The surge has come as more companies, professional investors, and even the government of El Salvador are buying Bitcoin, further expanding its base beyond its initial core of fanatics.
The latest converts entered the crypto world on Tuesday, when the first Bitcoin-linked exchange-traded fund aroused enormous interest among investors. Shares of the ProShares Bitcoin Strategy ETF changed hands 24.1 million times in a booming debut. It was even busier on Wednesday, with trading volume exceeding 29.4 million.
The ETF does not invest directly in Bitcoin. It invests in the Bitcoin-related futures market instead, but the industry sees the ETF attracting a new class of investors. Someone with an old-school brokerage account can buy the ETF, for example, without having to open a crypto trading account.
Investors are increasingly interested in Bitcoin as they are always looking for assets whose prices move independently of everything else in their portfolios. One school of thought says Bitcoin can offer investors protection against high inflation, and some fans see it as “digital gold,” although it doesn’t have a long track record to back that up.
More noble fans say digital assets are simply the future of finance, allowing transactions to bypass middlemen and fees with a currency that is not beholden to any government.
However, crypto-currencies are still very far from appealing to everyone. Critics point out that they are still not widely used as payment methods. They also criticize the amount of energy used by the crypto system, which can ultimately mean higher bills for home heating and other utilities amid a global crisis, as well as more emissions that alter the weather. The biggest threat, however, is all the regulatory scrutiny that goes into it.
China last month declared Bitcoin transactions illegal, for example. US regulators haven’t gone that far, but the chairman of the US Securities and Exchange Commission says the crypto world doesn’t offer enough protections for investors.
Cryptocurrencies are also known for their strong price fluctuations. The last time Bitcoin set a record, the price halved in about three months.
A big reason for this volatility is the breadth of the range of possibilities for Bitcoin’s future, said Gil Luria, technology strategist at DA Davidson.
On the one hand, Bitcoin could fall to zero if it ends up being a fad or if another cryptocurrency supplants it. On the other hand, it could usurp the role of the US dollar and other currencies and become “all money”. More people are taking a middle position, believing Bitcoin can be useful and has some value.
Luria said he only sees a 1% chance of the “all money” scenario happening, but that’s a better chance than five years ago.
“To become all-money, you have to involve a lot of people,” he said. And last year many new people got into bitcoin as it broke records and became more mainstream.
“The more Bitcoin goes up,” he said, “it becomes a self-fulfilling prophecy.”