Is the bitcoin price surge a bubble?
Bitcoin made a new high this week of $19,857, topping its December 2017 record of $19,783.

Bitcoin made a new record high this week, but it has been a characteristically wild ride. The cryptocurrency eclipsed $19,857 (£14,897) on Monday, topping its December 2017 high of $19,783.
That came after last week’s three-year high of $19,374, which was followed by a stomach-churning 14% plunge in a single day. Bitcoin has gained more than 170% so far this year.
The latest surge suggests that cryptocurrencies are overcoming the “credibility hump”, writes Sam Benstead in The Daily Telegraph. PayPal recently announced that it will let customers use bitcoin.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Institutional investors and hedge-fund managers have started to talk about the currency in more positive terms. It is sometimes dubbed “digital gold”: a key attraction is that unlike fiat currency, bitcoin cannot be debased. Only 21 million bitcoins will ever be created.
Google searches for “bitcoin price” have surged to the highest level since June 2019, says Omkar Godbole on coindesk.com. Yet searches are still running at only one-fifth of the level they reached during the bitcoin frenzy of late 2017. That suggests that while there is some froth around, institutional investors are playing a larger role in this rally than they did last time.
A monetary revolution
I have previously compared the buzz around bitcoin to 17th-century “Tulipmania”, says John Authers on Bloomberg. “Tulips, I averred, are at least rather pretty.” Yet unlike investment tulips, which collapsed into obscurity in February 1637, bitcoin “keeps coming back for more”.
There are still reasons to be sceptical, says Izabella Kaminska in the Financial Times. Far from the utopian “decentralised network” desired by its early proponents, bitcoin has become “just another highly intermediated and intensively regulated financial service”. Slow and expensive transaction costs make it a poor fit for the role of digital cash.
And yet as physical cash disappears, enabling governments and firms to encroach ever further into our lives, the appeal of cryptocurrency is only growing. For those who fear that “civil liberties cannot be taken for granted”, bitcoin’s “anonymous security” offers a “doomsday contingency system”.
The rich will increasingly see bitcoin as an attractive store of value, says Niall Ferguson on Bloomberg. The combined wealth of the world’s millionaires was $128.7trn in 2018. If they invested 1% of that in bitcoin, the price could rise to $75,000. Covid-19 has only expedited the world’s rush online, achieving in “ten months” what “might have taken ten years”, which has further cemented the status of cryptocurrencies. “We are living through a monetary revolution so multifaceted that few of us comprehend its full extent.”
Sign up for MoneyWeek's newsletters
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.
Alex is an investment writer who has been contributing to MoneyWeek since 2015. He has been the magazine’s markets editor since 2019.
Alex has a passion for demystifying the often arcane world of finance for a general readership. While financial media tends to focus compulsively on the latest trend, the best opportunities can lie forgotten elsewhere.
He is especially interested in European equities – where his fluent French helps him to cover the continent’s largest bourse – and emerging markets, where his experience living in Beijing, and conversational Chinese, prove useful.
Hailing from Leeds, he studied Philosophy, Politics and Economics at the University of Oxford. He also holds a Master of Public Health from the University of Manchester.
-
Should investors worry about investment trust discounts?
Investment trusts tend to trade at discounts to their net asset value, but the advantages that come with them mean this matters less to some investors
By Dan McEvoy Published
-
Reeves’s cash ISA raid: do cash hoarders deserve a tax break?
Opinion Rachel Reeves is desperate for her plan for economic growth to work - but meddling with the tax benefits of cash ISAs is simply a step too far, says Kalpana Fitzpatrick
By Kalpana Fitzpatrick Published
-
Should you continue to hold Smithson Investment Trust?
Opinion Smithson Investment Trust, a small- and mid-cap fund, has struggled to live up to lofty expectations, says Rupert Hargreaves.
By Rupert Hargreaves Published
-
Primark owner Associated British Foods is an overlooked gem going cheap — should you buy shares?
Associated British Foods, the owner of Primark, is a family-owned business, which means it is passed over by the increasingly popular passive investment funds. That spells opportunity for private investors, says Jamie Ward.
By Jamie Ward Published
-
Trump's tariffs and a shrinking market for alcohol deal double blow to Diageo
Donald Trump's tariffs are a further headache for drinks giant Diageo, which is already being buffeted by a decline in alcohol consumption.
By Dr Matthew Partridge Published
-
Three stocks in recruitment companies with promising recovery plays
Recruitment agency Robert Walters and its peers are struggling, but now's the time to buy, says Rupert Hargreaves
By Rupert Hargreaves Published
-
Four UK data companies to buy now
Companies that create, harness or turn data into a valuable offering could be sitting on a hugely profitable gold mine. Rupert Hargreaves picks four of the best UK data companies to buy now.
By Rupert Hargreaves Published
-
What’s the outlook for the shipping industry in 2025?
All we know for certain about the year ahead is that it will be volatile. But the container shipping sector thrives on choppy waters
By Rupert Hargreaves Published
-
Why Wise could be worth a lot more than its share price implies
Foreign-exchange transfer service Wise has the potential to become the Amazon of its sector – here's why you should consider buying this stock now
By Jamie Ward Published
-
Can The Gym Group pump up your portfolio?
Gym Group was one of the best UK small-cap stocks in 2024 and will beef up your profits this New Year
By Rupert Hargreaves Published