Such dramatic moves within short periods are not unusual and make it much more volatile than share investments – Bitcoin’s 20 per cent move compares to moves closer to 1 per cent for the New Zealand and US share markets.
Regardless of the volatility, some financial institutions and corporates like JP Morgan, Microsoft, Morgan Stanley and Tesla are taking Bitcoin seriously, leading investors to ponder whether Bitcoin is the currency and investment of the future.
If Bitcoin was a country, it would be one of the 30 largest countries ranked by electricity usage.
This is because mining new Bitcoins consumes immense amounts of power.
Unlike mining conventional resources, Bitcoin are ‘mined’ when computers solve complex algorithms and new Bitcoin are released as a reward.
In a world concerned with climate change, burning coal to generate power for Bitcoin mining is questionable if not crazy.
It’s argued that where proposed large-scale renewable plants in Europe, Asia and the US are held back by concerns of power oversupply, Bitcoin can step up.
Bitcoin nearly achieved this – from early January to mid-April it rose close to 70 per cent before dipping over the last two weeks.
Bitcoin’s strong price moves for investors, both up and down, have overall been very positive for long-term holders.