After becoming accessible to the general public in 2009, Bitcoin started to gain popularity around 2010, when the cost of one token increased from a few cents to $0.09.
Since then, its cost has risen by tens of thousands of dollars, occasionally fluctuating by thousands of dollars in a single day – its price has sharply increased recently as major institutional news is in the works.
However, this rapid price rise is something to be wary of, according to famed Gold bug Peter Schiff — also a known Bitcoin detractor.
Bitcoin’s jump to over $35,000, on October 24, its highest level since May of last year, gave the movement of the coin’s price rising potential further momentum.
From its lowest point this year, the price of BTC has overall increased by more than 125%. Its market valuation as a whole has increased to almost $672 billion as a result of this surge.
The increased anticipation that the Securities and Exchange Commission (SEC) will approve a spot Bitcoin ETF later this year has driven up the price of Bitcoin. Analysts predict that the regulator will simultaneously approve ETFs from companies including BlackRock, Invesco, Franklin Templeton, and Ark Invest.
According to the assumption, this clearance will increase institutional investors’ purchases of Bitcoin. Most importantly, Bitcoin will become more desirable due to its continued durability in a market with high-interest rates.
In the last ten years, Bitcoin has shown that it can endure. Following the demise of Mt. Gox in 2014, it flourished. It also managed to withstand the failures of Terra, FTX, Celsius, Voyager Digital, and Three Arrows Capital last year.
The Covid-19 pandemic, one of the biggest black swan events of our generation, was maybe the biggest period of growth for Bitcoin. And most recently, when the Federal Reserve raised interest rates to their highest level in more than two decades, it performed admirably.
Notably, Bitcoin has also performed better than gold, which is frequently regarded as a haven in difficult times. In comparison to gold, it has increased by more than 70% during the last 12 months.
Therefore, it is possible that many institutional investors will decide to devote a small amount of their capital to Bitcoin. Long-term demand and big inflows will result from such a meagre sum.
Peter Schiff, a well-known investor and supporter of gold, has cautioned investors that Bitcoin’s peak is approaching. He stated in a Tweet that when the SEC authorizes the ETF, a Bitcoin peak will be confirmed.
His claim has some validity. He said that the correlation between Bitcoin and other altcoins like Mina, Zilliqa, Stacks, Conflux, and Filecoin is what is driving their price growth.
“When the SEC authorises a Bitcoin ETF, I also predict that these coins will decline. Buying the rumour is also known as selling the news. The most recent instance of this was with XRP, which increased following Ripple’s victory over the SEC. After then, it fell more than 50% from its peak.”
However, Peter Schiff could be mistaken in the long run. Bitcoin has already undergone a significant stress test in the last ten years. Some of its more serious problems, such as the implosion of Terra Luna and the FTX collapse, have been overcome. It is therefore hard to rule out a scenario in which it moves and retests its record high as it gets more popular.