The explosion in bitcoin prices continues almost unabated, and one expert believes there is more behind the powerful move than rampant trader speculation.
“I think that some of the price of bitcoin is a bit of a mystery in the sense that why it has quadrupled over the year. But the fact it is what it is, and I think it’s a validation that the blockchain technology [it’s built on] is real and effective,” explained Bryan Routledge, associate professor of finance at the Tepper School of Business, Carnegie Mellon University on Yahoo Finance Live.
Routledge is an expert in asset pricing and in 2013 won The International Institute of Forecasters and SAS Award.
The bitcoin (BTC-USD) faithful love anything that validates the largest cryptocurrency. And the fact the bitcoin market appears to be functioning well during the crypto’s more than tripling in price since October — thanks to its underlying blockchain technology — feeds the validation narrative.
In turn, that could resurface talk of blockchain technology being ready for primetime use to power the next generation of business processes (which of course, fuels the bull case on bitcoin). Such talk had died down amid the crash in bitcoin and other crypto prices in late 2018.
“People might think about bitcoin as something they want to own as it is perhaps access to this blockchain technology in the sense that I want to own a piece of this future technology,” Routledge adds.
Whatever the reason, bitcoin prices are on fire right now.
Bitcoin prices surged beyond the $30,000 mark this weekend and are hovering near fresh record highs. On Sunday evening, prices crept to about $32,000. Over the past year, bitcoin prices are up a sizzling 338%.
Those actively in the market trading bitcoin say newfound institutional demand has fueled the latest surge, not just views on blockchain. The buying, pros think, only supports the view of bitcoin as a credible alternative to fiat currencies.
In December, insurance giant MassMutual unveiled a $100 million investment in bitcoin for its general investment account. PayPal continues to buy up bitcoin to support the launch of the capability to buy, sell and trade cryptocurrency from a PayPal account. And Square recently said it will allow customers for the first time to receive bitcoin back on transactions, a move that triggers the payments platform to buy more bitcoin.
“Bitcoin is for everyone,” crypto bull Mike Novogratz said on Yahoo Finance Live. “Everyone should put 2% to 3% of their net worth in bitcoin and look at it in five years, and it’s going to be a whole lot more.”
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