A week ago I wrote about how the Bitcoin (CURRENCY: BTC) price had reached a new high of US$3,360.
Well fast forward to today and the incredible rally of the cryptocurrency just went into overdrive.
Over the weekend the BTC price reached an all-time high of US$4,225.40, meaning its value had increased fourfold this year.
At the time of writing the cryptocurrency has given back some of these gains and is sitting at US$4,100 per U.S. dollar. This gives it a market value of approximately US$64 billion.
Why has Bitcoin rocketed higher?
According to CNBC, this recent rally has been largely the result of demand from Japanese traders.
Approximately 46% of BTC's global trade volume was made in Japanese yen in the last 24 hours, up from around a third a day earlier.
As well as safe haven assets like gold, demand for the cryptocurrency in Japan and South Korea has picked up amid rising tensions between the United States and North Korea.
Should you invest?
Unlike the gold that miners such as Newcrest Mining Limited (ASX: NCM) and Resolute Mining Limited (ASX: RSG) pull out of the ground, it is difficult to define value in Bitcoin. Which makes its use as a safe haven asset especially puzzling.
Whilst it could well become part of everyday life and continue its incredible run for the foreseeable future, putting a price on its worth is near impossible. In ten years it could easily be worthless or as much as US$100,000.
In my opinion this unpredictability means that BTC is something best left to the day traders. For investors, I would suggest avoiding cryptocurrencies and considering long-term investments in the shares of Altium Limited (ASX: ALU) and XERO FPO NZX (ASX: XRO) instead.
Only time will tell whether or not they will outperform Bitcoin over the next decade, but my money is on them doing so.
