World News – GB – Bitcon’s price is hitting all-time highs, and backers are hoping this time won’t be disrupted

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Reuters |
London
Last update was on 19 November 2020 10:55 PMST

LONDON (Reuters) – As Bitcoin soars to an all-time high in 2017, backers hope that a frenzied drop in retail investors will reduce the chance of a crash this time.. . document. Write («  »); googletag. poultice. push (function () {googletag. selectOutOfPageSlot (‘/ 6516239 / outofpage_1x1_desktop’, ‘div-gpt-ad-1490771277198-0’). addService (googletag. pubads ()); googletag. Popads (). enableSyncRendering (); googletag. enableServices ();});

But with little prevalent use as a form of payment and global uncertainty holding back financial markets, bitcoin is still far from a safe bet, analysts said..

“There are a lot of differences from what was happening before,” said Larry Cermak, director of research at cryptocurrency media company The Block. .

“The price has risen steadily, and we are seeing very little participation from retail and markets becoming much more liquid and more accessible institutions.. At the moment, although it is definitely not a safe investment, it is still very risky.

Bitcoin broke $ 18,000 (£ 13,549) on Wednesday, reaching its highest level since December.. 2017, after jumping nearly 160% this year.

The steep trajectory of his rally in 2020 reflects the echo of 2017, when a wave of retail-led buying pushed him close to $ 20,000, but collapsed more than 50% a month later.. .

In contrast to 2017, Assets now boasts a functioning derivative market and custody services by established financial institutions.

CME Group Inc’s open interest bitcoin futures contract exceeded $ 1 billion this week for the first time since its launch in December. In 2017, as centers in the major options markets grew to more than $ 4 billion from almost nothing in early 2019, according to crypto data provider Skew.

Meanwhile, large companies including Japan’s Fidelity Investments and Nomura Holdings Inc., began protecting bitcoin and other cryptocurrencies for institutional investors..

“There is no comparison whatsoever in terms of market maturity between this year and 2017,” said Ryan Silkes, CEO of encrypted data company Misari.. . “At that time, the derivatives and credit markets were barely in place (and) the institutional guardianship did not exist.

The emergence of this type of infrastructure made it easier for professional investors from hedge funds to family offices to search for cryptocurrencies.

« Accessibility changed three years ago, so the types of players ready to join have expanded, » said Tim Swanson, head of market intelligence at blockchain software company Clearmatics.. .

The organization has also been developed. While the cryptocurrency sector remains mostly lightly supervised or unregulated, global standards have emerged in areas such as Anti-Money Laundering (AML), opening the way for larger investors..

Last month, PayPal Holdings Inc said it would open its platform to cryptocurrencies while rival Square Inc said it had invested 1% of its total assets in Bitcoin..

Unlike in 2017, Bitcoin’s price was supported by the appetite for riskier assets in the wake of government and central bank stimulus measures to combat the impact of COVID-19..

Bitcoin’s supply has been set at 21 million, protecting it from policies that drive inflation, advocates say.

Richard Galvin of Crypto Fund Digital Asset Capital Management said the combo has allowed « a wider group of investors, including those with a more fundamental mindset, to participate in setting prices ». .

However, despite all the improvements in market structure and prevailing recognition, Bitcoin remains highly volatile. The cryptocurrency sector is still more opaque and less regulated than the mainstream financial markets. Trading data remains incomplete and concerns about market manipulation are rife.

« Long story short, the market is still a risky, risky asset, » said Cryptocurrency consultant Colin Platt.

“There is no guarantee that it will be used widely as ‘money’ due to the cost of mining, the use of Bitcoins and the ease of use of payment cards or contactless smartphones to facilitate electronic payment,” said Ross Mold, director of investment at AJ Bell.. .

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World News – GB – Bitcon rose to nearly all-time highs, backers hope this time won’t be disrupted

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