The 12-year rollercoaster ride known as bitcoin has entered another steep rise, with the digital currency hitting a five-month high Monday, as traders have turned to greed from fear.
Bitcoin recently traded at $57,207, up 2%. It has soared 27% in the past month, but remains below its April record high of $64,863.
Recent comments from top Federal Reserve and Securities and Exchange Commission officials that they won’t ban the cryptocurrency have generated enthusiasm among investors. Of course, the Fed and the SEC didn’t ban all the dot.com stocks that collapsed in 2001 either.
The bitcoin debate continues to rage among bulls and bears.
Bulls say bitcoin’s use as a medium of exchange in normal commercial transactions will grow.
Bears point out that few consumers and companies will want to use such an unstable currency.
Bitcoin bulls say the digital asset is a hedge against inflation and a store of value. Bears note that the only thing bitcoin has proved to be so far is a vehicle for speculation.
The bulls also maintain that the currency can protect investors against declines in other markets, like stocks. But the bears note that since bitcoin was created in 2009, no sustained drop in stocks has occurred to test that theory.
TheStreet.com’s Brent Kenwell offered guidance Thursday on how to trade the cryptocurrency:
“A move above this week’s high opens the door to the 78.6% retracement near $57,175. Above that could put $60,000 in play, followed by a push to the highs near $65,000."