It certainly has been a wild ride for the Bitcoin price over the last few days. Between Thursday and Friday night the cryptocurrency put on a gain of over 21% to reach an all-time high of US$5,856.10.
Since then, however, the cryptocurrency has come under pressure from profit taking and is currently fetching US$5,553.42.
According to CNBC, Friday's rally was the result of speculation that China will soon reverse its ban on cryptocurrency exchanges, providing Chinese traders with easier access to Bitcoin once again.
Furthermore, the report indicates that the potential for another split appears to be making traders bullish.
Earlier this year bitcoin split, creating a new cryptocurrency called Bitcoin Cash. While many doomsayers thought this was going to cause an almighty crash, the fact that Bitcoin recently hit an all-time high goes to show how very differently things turned out.
In November Bitcoin will once again split, creating Bitcoin Gold. Owners of Bitcoin will automatically receive a proportionate amount of Bitcoin Gold.
It seems as though some traders want to be in a position to take advantage of this split and receive some Bitcoin Gold.
Should you?
While I do agree that Bitcoin's lack of correlation to any other asset class could in fact help to diversify a portfolio, I like to invest in assets that I believe to be undervalued or at least fair value.
As it isn't possible to value Bitcoin, it's impossible to know whether it is undervalued or not. So because of this I think I'll stick to quality tech shares such as Altium Limited (ASX: ALU) and Appen Ltd (ASX: APX).
