There can be no doubting the phenomenal run enjoyed by Bitcoin and other crypto devotees over the past twelve months.
Bitcoin, the cryptocurrency standard bearer, delivered a more than 300% return last year and has started 2021 on the front foot, rising more than 10% in January.
Where should investors expect it to go from here? Naysayers predict a repeat of its previous 2017 post-bull market collapse with Nouriel Roubini, the economist dubbed “Dr Doom”, calling it a “pure speculative bubble with no fundamental value” in the Financial Times.
Market commentators cite several factors for the meteoric ascent of Bitcoin over the past year, including unprecedented monetary easing by central banks that may have eroded trust in regular currencies, a collapse in yields resulting in non-yielding Bitcoin becoming comparatively attractive, and speculation that it may be the medium of exchange of the future.
What Bitcoin and cryptocurrencies actually are is notoriously hard to either understand or accurately explain.
US comedian John Oliver famously labelled them as “everything you don’t understand about money combined with everything you don’t understand about computers”. Disciples of the “asset class”, if indeed it can be described as that, claim however, that they represent the future…