(by Simon STAHL, AWP)

Zurich (awp) - Since the fall, bitcoin has caused a lot of ink to flow, especially after setting new records, thanks in particular to the interest of institutional investors.

The most renowned cryptocurrency has had a turbulent year. In the spring, it had plunged in the wake of the financial markets below the 5,000 dollar mark, before flirting again, in May, with the 10,000 dollar mark.

In July, a bitcoin was already trading well above this symbolic threshold, and in mid-December, the price for the first time in its history crossed the 20,000 dollar mark. The historic high recorded by the Luxembourg exchange Bitstamp currently stands at 24,298 dollars.

More mature market

It should be noted that compared to the last peak of 2017/18, price differences on the main exchanges have been significantly lower. And according to observers, the increase this time was primarily due to institutional investors, who pushed prices up.

Investor demand for digital currencies, alongside stocks and currencies, is “huge,” says Patrick Heusser of Crypto Broker.

Added to this is the more positive posture of several large investment banks, which increasingly recognize the maturity of the cryptocurrency. A technical analysis from Citibank setting a target price of 300,000 francs had caused quite a stir.

Even bitcoin's most vocal critics have had to water down their wine in the face of the digital currency's strength, like economist Nouriel Roubini, who called it "the biggest bubble in the world." history of mankind" and "mother of all deceptions".

In November, the Turkish-born crypto-skeptic admitted in an interview that bitcoin, while not a currency, could be "partially" seen as a store of value due to its very limited issuance. This did not prevent him from returning to the charge in early December, declaring that “bitcoin is not an asset, because it has no intrinsic value”.

Diversification tool

The torrents of liquidity pumped into the economy by central banks in the wake of bailouts to deal with the ravages of the coronavirus crisis are not only prompting early enthusiasts and monetary critics to turn to assets alternatives, but also companies, which are now ready to invest their reserves in bitcoins, as part of a diversification strategy.

In July, US software maker MicroStrategy caused a stir by announcing that it would invest part of its cash reserves in alternative assets. In September, the company purchased $425 million worth of bitcoins.

Financial services provider Square, from Twitter co-founder Jack Dorsey, has supplemented its cash position with bitcoins to the tune of $50 million.

Payment service provider PayPal 's announcement to allow its own customers to use bitcoin as payment on its platform - almost to the day a year after it pulled out of the giant's Libra digital currency project of social networks Facebook - has also made waves.

Credible alternative

British historian and economics professor Niall Ferguson goes even further, and cites the reasons why competition between currencies could also influence the development of bitcoin in the years to come.

According to him, the pandemic first accelerated the advance of digital applications: "What would have taken perhaps 10 years has been achieved in 10 months", wrote the scholar in a widely circulated column. In addition, there has been a significant increase in the risks of surveillance and financial fraud.

For Niall Ferguson, bitcoin has long since become a kind of "digital gold", offering investors a guarantee of scarcity and high mobility, as well as a low correlation with other asset classes.