Bitcoin drops slightly after hitting new record high

ABC NEWS (Australia)

The price of bitcoin the world's largest cryptocurrency has hit an all-time high. The digital coin surged to more than sixty-nine thousand US dollars before dropping back down. This surge beats the previous record high bitcoin hit in November 2021.

Transcript

00:00 Bitcoin is a virtual currency.

00:04 This means instead of your account balance being stored by a bank, it's actually the

00:08 product of agreement between millions of computers all around the world.

00:13 As to why it has value, it has value because people think it does.

00:17 Some people might be able to use it to buy certain small products, but for the most part,

00:22 it's really a speculative investment at this point.

00:25 And why has it shot up in value so dramatically recently?

00:29 So there are two key things that I'd really point to.

00:32 The first is the world first approval by a US regulator of what we call a Bitcoin spot

00:38 ETF.

00:40 This means that you can invest in Bitcoin by buying something on the regular stock market

00:45 instead of having to mess with the technical details behind buying and keeping Bitcoin

00:50 safe on your own computer.

00:52 The other thing that's really driving the price of Bitcoin is that in a few weeks' time,

00:57 something pre-programmed into Bitcoin's code will make it so that there's actually less

01:02 Bitcoin that's coming into existence all the time.

01:05 Decreased supply is going to drive the price up, and we're seeing that reflected already.

01:11 Do US interest rates also have anything to do with Bitcoin's value and what will determine

01:15 its value in future?

01:18 Interest rates do have the ability to affect the extent to which people put their money

01:23 into riskier investments where they're trying to get a higher return.

01:27 So as interest rates go down, more money will flock to more speculative investments.

01:33 As to what will happen in future, if Bitcoin does find a place where it becomes common

01:38 to actually make real transactions and buy real products with Bitcoin, then we can expect

01:42 demand will go up and prices will go up.

01:45 But at this point, that really remains to be seen.

01:47 Yeah, so you're pretty sceptical about whether Bitcoin will become widely used to actually

01:53 buy things?

01:55 Bitcoin is an amazing technology, and from the perspective of a scientist, it's fascinating

02:01 because it allows us to do things in a new way.

02:04 However, the gap between a cool technology and wide-scale use really turns on a lot of

02:09 other things, including how comfortable people feel about it and how well it integrates into

02:14 our ordinary banking system.

02:17 And so there are all sorts of scams around with trying to suck people into Bitcoin because

02:21 there was such a buzz around it.

02:23 A) What's your warning to people to watch out for scams?

02:26 And B)

02:27 Is it still an incredibly risky investment?

02:31 So let's say instead of trying to buy Bitcoin yourself, you invested in the stock market.

02:37 Well, that might protect you from having your laptop hacked, but it's not going to protect

02:41 you from the kinds of decrease that we saw in Bitcoin's value from 2021 to 2022.

02:47 Some people lost more than 60% of their money in the span of less than a year.

02:52 With all the hype, Bitcoin is also super attractive to scammers out there.

02:57 Scammers flock to whatever is in the news, and with Bitcoin back in the news, you can

03:00 be sure that the scammers are still after your money.

03:03 [BLANK_AUDIO]

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