The value of bitcoin – the world’s most popular cryptocurrency – surged past £10,000 ($13,300) per coin on Wednesday (6 December), defying critics to reach yet another all-time high.
Only 12 hours prior, financial analysis platforms including CoinMarketCap and CryptoCompare, revealed it had broken $12,000 – a huge spike in value from $1,000 per coin in January.
Bitcoin, like rival currencies Litecoin and Ethereum, is decentralised online money built upon distributed ledger technology (DLT), known as the Blockchain.
The currency is volatile, which has led some experts to suggest the rise in value is indicative of a bubble.
Advocates of the technology believe it is the future of finance due to its embrace of the internet and decentralised circumvention of banks. Others – mostly those working for said banks – claim that it will crash and burn.
In late November, as bitcoin brushed passed $10,000, one expert told IBTimes UK the rise was bolstered by news from US derivatives operator CME Group that it was planning to launch Bitcoin futures contracts later this year – giving investors a safer way to short the currency.
“It’s the apprehension of futures trading as well as news begetting news and driving more hype,” said Charles Hayter, the CEO of market analysis platform CryptoCompare, at the time.
The most recent rise, as noted by The Telegraph, came as British payments app Revolut announced it was planning to let users buy and sell cryptocurrencies in European markets.
Based on speculation alone, experts suggested value was positively impacted by the news.
Earlier this week (4 December), it emerged that UK users may soon face heightened government regulation amid fears the cryptocurrency was used to fund criminals and terrorists.
For years, bitcoin has been the primary method of paying for illicit goods on the so-called dark web. Indeed, in September this year, Jamie Dimon, the chief executive officer (CEO) of financial giant JPMorgan, grabbed the headlines after controversially describing bitcoin as a “fraud”.
Could it be a bubble?
Yet despite the worry, the value of Bitcoin continued to rocket to even greater heights. How long it can ride the wave of good fortune, remains another matter altogether.
That question has become a topic of intense debate for those operating in the financial services industry. “This really is just the beginning,” commented Iqbal Gandham, director of a trading platform called eToro, late last month as the bitcoin value leapt past $10,000.
“While the price volatility in bitcoin leads some commentators to assume we’re in a Bitcoin bubble, the reality is that emerging technologies carrying radically new ideas will always see swings in their value before their potential is fully realised and the price stabilises,” he added.
Yet, as previously noted, others disagree. Economist Stephen Roach, Yale University senior fellow, told CNBC this week (5 December) that cryptocurrency was “a toxic concept for investors.”
He said: “This is a dangerous speculative bubble by any shadow or stretch of the imagination. I’ve never seen a chart of a security where the price really has a vertical pattern to it. And bitcoin is the most vertical of any pattern I’ve ever seen in my career. Like all bubbles, they burst.”
Source : IBtimes