Bitcoin's latest resurgence has seen its value double from falling to around $ 30,000 just three months ago, in mid-July. Many investors will kick themselves for missing something and wonder if they dare to invest in this volatile asset at the current dizzying level.
Earlier this month, JP Morgan issued a note that read: "Institutional investors seem to be turning to Bitcoin, perhaps seeing it as a better hedge against inflation than gold."
This may explain why the price of gold has been doing so badly lately, rising just 0.44 percent in the last six months. Investors prefer Bitcoin instead.
The latest Bitcoin price surge has accelerated with the launch of the first exchange-traded fund (ETF) to be traded in the US investing in Bitcoin.
The ProShares Bitcoin Strategy ETF will allow large institutional investors to invest money in cryptocurrencies, without buying real Bitcoins that could be lost to scammers or lost in digital wallets.
The new ETF started off with a bang, attracting nearly $ 1 billion in trading on the first day, while Fundstrat analyst Tom Lee claimed it could drive the price of Bitcoin to $ 168,000.
Analysts see the ETF launch as a sign that Bitcoin is becoming respectable, but Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said the sector remains a "wild west" for investors who should come closer with extreme caution.
"Just play with the money you can afford to lose."
Streeter said the FCA is concerned that volatile cryptocurrencies could "explode in the face of the financial sector" as more people and institutions accumulate.
READ MORE: Bitcoin vs Ethereum: Which Cryptocurrencies Have Real Longevity?
Most existing investors just hang on to their currencies, hoping that their value will rise and rise as demand from large institutions grows. The subsequent supply shortage is helping to further boost the price of Bitcoin.
Young people are particularly drawn to cryptocurrencies, and the city's watchdog, the Financial Conduct Authority, warns of the dangers through its InvestSmart campaign.
Holly Mackay, CEO of Boring Money, said those under 35 were seduced by the prospect of quick profits, both in crypto and fast-growing US tech stocks like Amazon, Apple and Tesla. "Teeth have been cut in a period of technology-driven growth, with great volatility and a crazy side of Bitcoin."
Mackay said the financial services industry now has "a great job to do to encourage new investors to diversify into more traditional and boring investments."
