What is the All Time High (ATH)?
Securities such as stocks, fiat currencies, and cryptocurrencies all experience price fluctuations from the first moment of their inception or introduction to the market. Based on factors such as the overall weather of the market, the security’s performance in that market, and the supply and demand of a specific security or what that security represents, these fluctuations create an overall trend. The highest point on this trend is called an all-time high (ATH) or a record high. This concept can also be considered for the market cap of a specific security.
Why is All Time High important?
A financial instrument might experience a number of all-time highs in its lifetime within the market. People look at these triumphs and see the potential for the market to reach that point again. The psychological effect of all-time highs is somewhat directly correlated with the experience and knowledge of an investor. If you are a weathered investor, you’ve seen many ups and downs and have a better appreciation for more important and fundamental criteria to evaluate a security’s behavior in the market, instead of holding onto your assets and hoping that the past might repeat itself. However, an all-time high could be one of many indicators used to make long-term plans if used not out of pure optimism and excitement. Let’s briefly check out some of the most notable all-time highs for different securities in different markets.
History was made in May 2021 when Warren Buffett’s multinational conglomerate holding company, the “Berkshire Hathaway” reached a record high of $445,000 per share, the highest a stock has ever reached! Berkshire Hathaway is a major shareholder of Apple and the Bank of America and many giant subsidiaries such as HomeServices of America and GEICO Auto Insurance.
Lindt & Sprüngli AG
The Swiss chocolatier and confectionery company hit an all-time high of $118,400 per share on November 9, 2021, making it the second-highest stock price in history. The company has expanded far away from European markets and even into the American continent. In November 2018, Lindt opened its first American travel retail store in JFK Airport’s Terminal 1 and its flagship Canadian shop in Yorkdale Shopping Centre, Toronto.
According to CoinMarketCap.com, the mother of all decentralized cryptocurrencies hit an all-time high of $67,566 on November 8th, 2021. Bitcoin has been suffering from a steady decline for the past few weeks and is now trading for $29.757 but most estimates are optimistic about its future. Price predictions range from conservative expectations of around $100,000 to wild estimates made by the likes of Bloomberg of around $400,000 for every Bitcoin. The cryptocurrency market is volatile in nature and surprises are not a rare occasion, even for veteran investors.
According to tradingeconomics.com, from 1968 to 2022, gold reached an all-time high of a whopping $2074.88 per ounce in August 2020. Some economists predict that gold’s current price of $1,930 might move to $2,300 in the next five years. If the US public debt becomes an issue, then the price of gold may hit $3,000 per ounce.
An all-time high is the highest price (or market cap) that a financial instrument such as stocks and cryptocurrencies has reached and acts as a motivation for people who want to invest in that asset. Tying all your hopes to the record high of an asset is not a smart decision to make, but can be an indicator to help you evaluate the performance and predict the future of a security.