Investors have sent the price of bitcoin skyrocketing during the pandemic as the Federal Reserve cut interest rates to near zero in March 2020 (and expects to keep them there for several more years), severely weakening the US dollar.
That makes bitcoin, comparatively, an attractive currency. There’s a set limit to the number of bitcoins on the planet, and investors believe that once the supply runs out, the digital coin’s value can only increase.
As bitcoin surges to all-time highs, big, name-brand investors are stockpiling it, and huge consumer companies are embracing it, aiding in bitcoin’s soaring valuation.
Appetite for risk
“This could be a blow up top bubble,” Scaramucci told CNN Business in January. “We expect the fund to be volatile and it could lose money,”
“The more likely trajectory is that people can make a monumental amount of money. Bitcoin is unfettered by Federal Reserve policy or gold supply issues,” he said. “There is more demand for bitcoin now than supply. The price should go up.”
CNN Business’ Paul R. La Monica contributed to this report.