U.S. Markets close in 2 hrs 54 mins
  • S&P 500

    3,850.34
    +51.43 (+1.35%)
     
  • Dow 30

    31,170.71
    +240.19 (+0.78%)
     
  • Nasdaq

    13,447.24
    +250.06 (+1.89%)
     
  • Russell 2000

    2,155.46
    +4.32 (+0.20%)
     
  • Crude Oil

    53.20
    +0.22 (+0.42%)
     
  • Gold

    1,862.90
    +22.70 (+1.23%)
     
  • Silver

    25.70
    +0.39 (+1.52%)
     
  • EUR/USD

    1.2111
    -0.0022 (-0.1817%)
     
  • 10-Yr Bond

    1.0920
    0.0000 (0.00%)
     
  • Vix

    21.83
    -1.41 (-6.07%)
     
  • GBP/USD

    1.3643
    +0.0008 (+0.0614%)
     
  • USD/JPY

    103.5800
    -0.3120 (-0.3003%)
     
  • BTC-USD

    34,908.77
    +508.80 (+1.48%)
     
  • CMC Crypto 200

    690.22
    -10.39 (-1.48%)
     
  • FTSE 100

    6,740.39
    +27.44 (+0.41%)
     
  • Nikkei 225

    28,523.26
    -110.24 (-0.39%)
     

Bitcoin price surge delivers this powerful message to naysayers: expert

Brian Sozzi
·Editor-at-Large
·3 min read

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.

PARIS, FRANCE - DECEMBER 17: In this photo illustration, a visual representation of the digital Cryptocurrency, Bitcoin is on display on December 17, 2020 in Paris, France. The value of Bitcoin (BTC) has exceeded the threshold of 20,000 dollars for the first time in history. This increase could be explained in particular by the growing interest of institutional investors in the most famous cryptocurrency. During the last 24 hours, the value of Bitcoin has risen 16.8% to cross the symbolic mark of 20,000 dollars and climb to 23,250 dollars. (Photo illustration by Chesnot/Getty Images)
In this photo illustration, a visual representation of the digital Cryptocurrency, Bitcoin is on display on December 17, 2020 in Paris, France. (Photo illustration by Chesnot/Getty Images)

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.”

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

What’s hot from Yahoo Finance:

Watch Yahoo Finance’s live programming on Verizon FIOS channel 604, Apple TV, Amazon Fire TV, Roku, Samsung TV, Pluto TV, and YouTube. Online catch Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, SmartNews, LinkedIn, and reddit.