Dubai: Bitcoin prices scaled new peaks on Thursday, breaching the $2,500 mark, but analysts are worried given the digital currency’s swift rise.
Bitcoin prices jumped more than 9 per cent at $2,678.47 on Thursday, after hitting a peak of $2,726.86, according to coindesk data. The cryptocurrency has gained nearly 200 per cent since the start of the year, compared to a 88 per cent rise in a share of Apple or an 18 per cent fall in gold prices.
But an analyst was of the opinion that traders need to book some profits after a significant rise.
“The parabolic rally is still intact. Investors need to careful with parabolic rallies, and need to book profits from time to time,” said an analyst who wished not to be named.
The previous two parabolic moves seen since the last 10 years saw a gain of 1,800 per cent from the lows and this is the third time that it has again gained more than 1,800 per cent from the recent low.
“So we may see a repeat of what happened after the parabolic rise when Bitcoin prices fell sharply. So a major profit taking is due in Bitcoin,” the analyst added.
Jeffrey Gundlach, chief executive officer of DoubleLine Capital, in a tweet, tried to draw a parallel between the rise in bitcoin and Shanghai stocks.
“Bitcoin up 100 per cent in under 2 months. Shanghai down almost 10 per cent same timeframe, compared to most global stocks up. Probably not a coincidence!,” said Gundlach in a tweet on Wednesday.
Gains during the period came in after Japan allowed retailers to start accepting bitcoin as a legal currency. That has boosted trading in yen, which now accounts for over 40 per cent of all Bitcoin trade.
But Andreas M. Antonopoulos, bitcoin and information security expert advises traders to take a longer term view on the currency.
“I think this is truly revolutionary and disruptive technology. On the way there, however, I expect a lot of ups and downs. It takes a very long-term view to be comfortable in this space,” Antonopoulos said.
