The price of Bitcoin has hit record highs over the past year as investors scramble to buy the cryptocurrency.
Analysts are divided on whether Bitcoin’s value could rise even further as the US dollar drops or if there is an imminent correction coming.
The cryptocurrency has proved to be a volatile investment, with prices soaring by 300% in the last year alone.
So what is the current price and is it worth investing?
How much is Bitcoin worth?
Bitcoin fell more than 10 per cent on Monday morning after a record-breaking weekend where its value broke $34,000 (£24,870).
As of Monday morning, the price of a single Bitcoin is around $30,700 (£22,475), according to the Coindesk website.
This weekend’s rise put the total gain over the last year at almost $5,000.
The price of many other digital currencies has also risen sharply. Ethereum, the second biggest cryptocurrency, gained 465% in 2020.
But the soaring price has raised concerns that Bitcoin is due for a dramatic correction, as happened three years ago when the value collapsed after a bull run.
During the rally in 2017 Bitcoin came close to breaking through the $20,000 level, only to hit extreme lows and fall below $3,300.
It passed $19,000 in November last year before dropping sharply again.
Why has the price risen?
The rise was put down to interest from big investors seeking quick profits, but some analysts think Bitcoin’s value could rise even further if the value of the US dollar weakens.
While the value of the US currency rose in March at the start of the coronavirus pandemic as investors sought safety amid the uncertainty, it has since dropped due to major stimulus from the US Federal Reserve.
The dollar ended last year with its biggest annual loss since 2017.
In October, Bank of England Governor Andrew Bailey said he was “very nervous” about people using Bitcoin for payments pointing out that investors should realise its price is extremely volatile.
“I have to be honest, it is hard to see that Bitcoin has what we tend to call intrinsic value,” he said. “It may have extrinsic value in the sense that people want it.”
While economics professor Nouriel Roubini, a long-time critic of bitcoin, insists it has no intrinsic value.
“The price of bitcoin is totally manipulated by a bunch of people, by a bunch of whales. It doesn’t have any fundamental value,” he told Yahoo Finance last month.
“We’re close to the point where the hyperbolic bubble is going to go bust.”